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Panel Data Models with Time-Varying Latent Group Structures

Yiren Wang, Peter C B Phillips, Liangjun Su

arXiv 29 Jul 2023 · Econometrics · publishedJournal of Econometrics (2024) · 15 citations (OpenAlex)

arXiv:2307.15863 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This paper considers a linear panel model with interactive fixed effects and unobserved individual and time heterogeneities that are captured by some latent group structures and an unknown structural break, respectively. To enhance realism the model may have different numbers of groups and/or different group memberships before and after the break. With the preliminary nuclear-norm-regularized estimation followed by row- and column-wise linear regressions, we estimate the break point based on the idea of binary segmentation and the latent group structures together with the number of groups before and after the break by sequential testing K-means algorithm simultaneously. It is shown that the break point, the number of groups and the group memberships can each be estimated correctly with probability approaching one. Asymptotic distributions of the estimators of the slope coefficients are established. Monte Carlo simulations demonstrate excellent finite sample performance for the proposed estimation algorithm. An empirical application to real house price data across 377 Metropolitan Statistical Areas in the US from 1975 to 2014 suggests the presence both of structural breaks and of changes in group membership.

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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
1Su, L., Shi, Z., and Phillips, P. C. B (2016) Identifying latent structures in panel data self0.84333100%
2Chernozhukov, V., Hansen, C. B., Liao, Y., and Zhu, Y (2020) Inference for heterogeneous effects using low-rank estimations0.76911745%
3Su, L. and Chen, Q (2013) Testing homogeneity in panel data models with interactive fixed effects self0.7375440%
4Jin, J., Ke, Z. T., Luo, S., and Wang, M (2022) Optimal estimation of the number of network communities0.7374350%
5Lumsdaine, R. L., Okui, R., and Wang, W (2023) Estimation of panel group structure models with structural breaks in group memberships and coefficients0.69361100%
6Okui, R. and Wang, W (2021) Heterogeneous structural breaks in panel data models0.69361100%
7Moon, H. R. and Weidner, M (2017) Dynamic linear panel regression models with interactive fixed effects0.67916431%
8Bai, J (2009) Panel data models with interactive fixed effects0.6597529%
9Hong, S., Su, L., and Jiang, T (2023) Profile gmm estimation of panel data models with interactive fixed effects self0.64422100%
10Lu, X. and Su, L (2016) Shrinkage estimation of dynamic panel data models with interactive fixed effects self0.5855320%

Showing the top 10 of 69 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
1Robust Inference Methods for Latent Group Panel Models under Possible Group Non-Separation0.81142
2Estimation of Grouped Time-Varying Network Vector Autoregression Models0.64422
3Bias-Reduced Estimation of Finite Mixtures : An Application to Latent Group Structures in Panel Data0.51121
4Identification and Estimation in a Time-Varying Endogenous Random Coefficient Panel Data Model0.40511
5Specification testing with grouped fixed effects0.40511
6Heterogeneous Grouping Structures in Panel Data0.40511
7Grouped fixed effects regularization for binary choice models0.40511