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Distributional Effects with Two-Sided Measurement Error: An Application to Intergenerational Income Mobility

Brantly Callaway, Tong Li, Irina Murtazashvili, Emmanuel Tsyawo

arXiv 20 Jul 2021 · Econometrics · publishedJournal of Econometrics (2026) · 1 citations (OpenAlex)

arXiv:2107.09235 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This paper considers identification and estimation of distributional effect parameters that depend on the joint distribution of an outcome and another variable of interest ("treatment") in a setting with "two-sided" measurement error -- that is, where both variables are possibly measured with error. Examples of these parameters in the context of intergenerational income mobility include transition matrices, rank-rank correlations, and the poverty rate of children as a function of their parents' income, among others. Building on recent work on quantile regression (QR) with measurement error in the outcome (particularly, Hausman, Liu, Luo, and Palmer (2021)), we show that, given (i) two linear QR models separately for the outcome and treatment conditional on other observed covariates and (ii) assumptions about the measurement error for each variable, one can recover the joint distribution of the outcome and the treatment. Besides these conditions, our approach does not require an instrument, repeated measurements, or distributional assumptions about the measurement error. Using recent data from the 1997 National Longitudinal Study of Youth, we find that accounting for measurement error notably reduces several estimates of intergenerational mobility parameters.

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98
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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Haider, Steven, Solon, Gary (2006) Life-cycle variation in the association between current and lifetime earnings1.00063100%
2An, Yonghong, Wang, Le, Xiao, Ruli (2020) A nonparametric nonclassical measurement error approach to estimating intergenerational mobility elasticities1.00054100%
3Nybom, Martin, Stuhler, Jan (2017) Biases in standard measures of intergenerational income dependence1.00053100%
4Hausman, Jerry, Liu, Haoyang, Luo, Ye, Palmer, Christopher (2021) Errors in the dependent variable of quantile regression models0.96510590%
5Bhattacharya, Debopam, Mazumder, Bhashkar (2011) A nonparametric analysis of black–white differences in intergenerational income mobility in the United States0.92843100%
6Chetty, Raj, Hendren, Nathaniel, Kline, Patrick, Saez, Emmanuel (2014) Where is the land of opportunity? The geography of intergenerational mobility in the United States0.92843100%
7Li, Tong, Vuong, Quang (1998) Nonparametric estimation of the measurement error model using multiple indicators self0.92843100%
8Black, Sandra E, Devereux, Paul, Ashenfelter, Orley, Card, David (2011) Recent developments in intergenerational mobility0.84333100%
9Firpo, Sergio, Galvao, Antonio F, Song, Suyong (2017) Measurement errors in quantile regression models0.84333100%
10Mazumder, Bhashkar (2005) Fortunate sons: New estimates of intergenerational mobility in the United States using social security earnings data0.84333100%

Showing the top 10 of 98 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1Endogenous Quantile Regression with Measurement Error in Dependent Variable0.51121