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Estimation of Latent Group Structures in Time-Varying Panel Data Models

Paul Haimerl, Stephan Smeekes, Ines Wilms

arXiv 29 Mar 2025 · Econometrics

arXiv:2503.23165 · PDF · Extracted main text

Abstract

We introduce a panel data model where coefficients vary both over time and the cross-section. Slope coefficients change smoothly over time and follow a latent group structure, being homogeneous within but heterogeneous across groups. The group structure is identified using a pairwise adaptive group fused-Lasso penalty. The trajectories of time-varying coefficients are estimated via polynomial spline functions. We derive the asymptotic distributions of the penalized and post-selection estimators and show their oracle efficiency. A simulation study demonstrates excellent finite sample properties. An application to the emission intensity of GDP highlights the relevance of addressing cross-sectional heterogeneity and time-variance in empirical settings.

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53
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132
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distinct cited
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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, Liangjun and Shi, Zhentao and Phillips, Peter C. B (2016) Identifying Latent Structures in Panel Data0.9507486%
2Junhui Qian and Liangjun Su (2016) Shrinkage estimation of common breaks in panel data models via adaptive group fused Lasso0.9098475%
3Ali Mehrabani (2023) Estimation and identification of latent group structures in panel data0.87415667%
4Bonhomme, Stéphane and Manresa, Elena (2015) Grouped Patterns of Heterogeneity in Panel Data0.84333100%
5Liangjun Su and Xia Wang and Sainan Jin (2019) Sieve Estimation of Time-Varying Panel Data Models With Latent Structures0.78325848%
6Jianhua Z. Huang and Colin O. Wu and Lan Zhou (2004) POLYNOMIAL SPLINE ESTIMATION AND INFERENCE FOR VARYING COEFFICIENT MODELS WITH LONGITUDINAL DATA0.7547443%
7Haimerl, Paul and Smeekes, Stephan and Wilms, Ines and Mehrabani, Ali (2025) PAGFL: Joint Estimation of Latent Groups and Group-Specific Coefficients in Panel Data Models self0.7374450%
8Zongwu Cai (2007) Trending time-varying coefficient time series models with serially correlated errors0.64422100%
9Hannes Leeb and Benedikt M. Pötscher (2008) Sparse estimators and the oracle property, or the return of Hodges’ estimator0.64422100%
10Peter M. Robinson (2012) Nonparametric trending regression with cross-sectional dependence0.64422100%

Showing the top 10 of 53 scored citations.