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Clustered Covariate Regression

Abdul-Nasah Soale, Emmanuel Selorm Tsyawo

arXiv 18 Feb 2023 · Econometrics

arXiv:2302.09255 · PDF · Extracted main text

Abstract

High covariate dimensionality is increasingly occurrent in model estimation, and existing techniques to address this issue typically require sparsity or discrete heterogeneity of the unobservable parameter vector. However, neither restriction may be supported by economic theory in some empirical contexts, leading to severe bias and misleading inference. The clustering-based grouped parameter estimator (GPE) introduced in this paper drops both restrictions and maintains the natural one that the parameter support be bounded. GPE exhibits robust large sample properties under standard conditions and accommodates both sparse and non-sparse parameters whose support can be bounded away from zero. Extensive Monte Carlo simulations demonstrate the excellent performance of GPE in terms of bias reduction and size control compared to competing estimators. An empirical application of GPE to estimating price and income elasticities of demand for gasoline highlights its practical utility.

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41
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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
1Belloni, Alexandre, Chernozhukov, Victor, Hansen, Christian (2014) Inference on treatment effects after selection among high-dimensional controls1.00094100%
2Bonhomme, Stéphane, Lamadon, Thibaut, Manresa, Elena (2022) Discretizing unobserved heterogeneity1.00053100%
3Ke, Zheng Tracy, Fan, Jianqing, Wu, Yichao (2015) Homogeneity pursuit1.00053100%
4Chernozhukov, Victor, Newey, Whitney K, Singh, Rahul (2022) De-Biased Machine Learning of Global and Local Parameters Using Regularized Riesz Representers0.9568488%
5Bonhomme, Stéphane, Manresa, Elena (2015) Grouped patterns of heterogeneity in panel data0.9507486%
6Belloni, Alexandre, Chen, Daniel, Chernozhukov, Victor, Hansen, Chri… (2012) Sparse models and methods for optimal instruments with an application to eminent domain0.9416483%
7Chernozhukov, Victor, Hansen, Christian, Liao, Yuan, Zhu, Yinchu (2023) Inference for low-rank models0.87462100%
8Semenova, Vira, Chernozhukov, Victor (2021) Debiased machine learning of conditional average treatment effects and other causal functions0.7374275%
9Cheng, Xu, Schorfheide, Frank, Shao, Peng (2021) Clustering for multi-dimensional heterogeneity0.73732100%
10Belloni, Alexandre, Chernozhukov, Victor, Chetverikov, Denis, Kato,… (2015) Some new asymptotic theory for least squares series: Pointwise and uniform results0.64422100%

Showing the top 10 of 41 scored citations.