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Bayesian Estimation of Panel Models under Potentially Sparse Heterogeneity

Hyungsik Roger Moon, Frank Schorfheide, Boyuan Zhang

arXiv 20 Oct 2023 · Econometrics

arXiv:2310.13785 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We incorporate a version of a spike and slab prior, comprising a pointmass at zero ("spike") and a Normal distribution around zero ("slab") into a dynamic panel data framework to model coefficient heterogeneity. In addition to homogeneity and full heterogeneity, our specification can also capture sparse heterogeneity, that is, there is a core group of units that share common parameters and a set of deviators with idiosyncratic parameters. We fit a model with unobserved components to income data from the Panel Study of Income Dynamics. We find evidence for sparse heterogeneity for balanced panels composed of individuals with long employment histories.

Citation extraction

33
references
70
in-text mentions
33
distinct cited
3
self-citations
25,521
main-text words

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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
1Liu (2023) Density Forecasts in Panel Data Models: A Semiparametric Bayesian Perspective0.84333100%
2Browning and Ejrnjes (2013) Heterogeneity in the Dynamics of Labor Earning0.81142100%
3Gu and Koenker (2017) Unobserved Heterogeneity in Income Dynamics: An Empirical Bayes Perspective0.81142100%
4Guvenen (2007) Learning Your Earning: Are Labor Income Shocks Really Very Persistent?0.81142100%
5Guvenen (2009) An Empirical Investigation of Labor Income Processes0.81142100%
6Geweke (1996) Variable Selection and Model Comparison in Regression0.73732100%
7Giannone, Lenza, and Primiceri (2021) Economic Predictions with Big Data: The Illusion of Sparsity0.73732100%
8Haider (2001) Earnings Instability and Earnings Inequality of Males in the United States: 1967 - 19910.73732100%
9Hoffmann (2019) HIP, RIP, and the Robustness of Empirical Earnings Processes0.73732100%
10Hryshko (2012) Labor Income Profiles are Not Heterogeneous: Evidence from Income Growth Rates0.73732100%

Showing the top 10 of 33 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
1Empirical Bayes Estimation in Heterogeneous Coefficient Panel Models0.40511