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Stationary Errors and Quantile Regression in Short Panels

Shakeeb Khan, Elie Tamer

arXiv 9 Aug 2026 · Econometrics

arXiv:2608.08750 · PDF · Extracted main text

Abstract

This paper studies a linear panel model with an unrestricted individual effect and a time- stationary idiosyncratic disturbance. We first show that stationarity is a strong restriction in a quantile model. In a linear conditional quantile specification with quantile-dependent slopes, equality of the conditional residual distributions across periods generically forces the slope coefficient to be constant over the quantile index. Thus, a stationary-error model identifies a common location coefficient rather than a collection of quantile-specific slope effects. We then develop a fixed-T estimator of this common coefficient. For each period, we run a cross- sectional quantile regression of the outcome on the full history of regressors. Stationarity makes the quantile projection of the composite individual effect and disturbance common across the period-specific regressions. Differences between diagonal and off-diagonal blocks of the resulting projection coefficients therefore identify the common slope whenever T>=2. We combine all such restrictions by a two-step minimum-distance estimator. The estimator is root-n-consistent and asymptotically normal with fixed T, permits unrestricted dependence across periods within an individual, and does not estimate the individual effects. We provide a consistent analytic covariance estimator, a cluster bootstrap, and an overidentification test of the projection restrictions implied by stationarity. Extensive Monte Carlo experiments show adequate performance under various designs.

Citation extraction

25
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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
1Chamberlain, G (1982) Multivariate Regression Models for Panel Data0.64422100%
2Angrist, J. D., V. Chernozhukov, and I. Fernández-Val (2006) Quantile Regression under Misspecification, with an Application to the U.S. Wage Structure0.40511100%
3Arellano, M., and S. Bonhomme (2016) Nonlinear Panel Data Estimation via Quantile Regressions0.40511100%
4Besstremyannaya, G. and S. Golovan (2019) “Reconsideration of a Simple Approach to Quantile Regression for Panel Data,"0.40511100%
5Botosaru, I., and C. Muris (2025) Identification of Time-Varying Counterfactual Parameters in Nonlinear Panel Models0.40511100%
6Canay, I. A (2011) A Simple Approach to Quantile Regression for Panel Data0.40511100%
7Chen, S., and X. Wang (2018) Semiparametric Estimation of Panel Data Models without Monotonicity or Separability0.40511100%
8Chernozhukov, V., I. Fernández-Val, J. Hahn, and W. K. Newey (2013) Average and Quantile Effects in Nonseparable Panel Models0.40511100%
9Chernozhukov, V., I. Fernández-Val, S. Hoderlein, H. Holzmann, and W… (2015) Nonparametric Identification in Panels Using Quantiles0.40511100%
10Firpo, S., A. F. Galvao, C. Pinto, A. Poirier, and G. Sanroman (2022) GMM Quantile Regression0.40511100%

Showing the top 10 of 21 scored citations.