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Estimation of a Factor-Augmented Linear Model with Applications Using Student Achievement Data

Matthew Harding, Carlos Lamarche, Chris Muris

arXiv 6 Mar 2022 · Econometrics · 1 citations (OpenAlex)

arXiv:2203.03051 · PDF · DOI · OpenAlex · Extracted main text

Abstract

In many longitudinal settings, economic theory does not guide practitioners on the type of restrictions that must be imposed to solve the rotational indeterminacy of factor-augmented linear models. We study this problem and offer several novel results on identification using internally generated instruments. We propose a new class of estimators and establish large sample results using recent developments on clustered samples and high-dimensional models. We carry out simulation studies which show that the proposed approaches improve the performance of existing methods on the estimation of unknown factors. Lastly, we consider three empirical applications using administrative data of students clustered in different subjects in elementary school, high school and college.

Citation extraction

60
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136
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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
1Heaton and Solo (2012) Estimation of high-dimensional linear factor models with grouped variables1.00064100%
2Pesaran (2006) Estimation and Inference in Large Heterogeneous Panels with a Multifactor Error Structure1.00063100%
3Chen, Jacho-Chávez, and Linton (2016) Averaging of An Increasing Number of Moment Condition Estimators0.97413392%
4Bai and Ng (2013) Principal components estimation and identification of static factors0.92843100%
5Madansky (1964) Instrumental variables in factor analysis0.92843100%
6Hansen and Lee (2019) Asymptotic theory for clustered samples0.88810370%
7Belloni, Chen, Chernozhukov, and Hansen (2012) Sparse Models and Methods for Optimal Instruments With an Application to Eminent Domain0.84315460%
8Windmeijer, Farbmacher, Davies, and Smith (2019) On the Use of the Lasso for Instrumental Variables Estimation with Some Invalid Instruments0.84333100%
9Heckman and Scheinkman (1987) The Importance of Bundling in a Gorman-Lancaster Model of Earnings0.84333100%
10Pudney (1981) Instrumental Variable Estimation of a Characteristics Model of Demand0.84333100%

Showing the top 10 of 60 scored citations.