Publication Type

Journal Article

Version

submittedVersion

Publication Date

9-2018

Abstract

This paper studies the estimation of a panel data model with latent structures where individuals can be classified into different groups with the slope parameters being homogeneous within the same group but heterogeneous across groups. To identify the unknown group structure of vector parameters, we design an algorithm called Panel-CARDS. We show that it can identify the true group structure asymptotically and estimate the model parameters consistently at the same time. Simulations evaluate the performance and corroborate the asymptotic theory in several practical design settings. The empirical application reveals the heterogeneous grouping effect of income on democracy.

Keywords

CARDS, Clustering, Heterogeneous slopes, Income and democracy, Minimum wage and employment, Oracle estimator, Panel structure model

Discipline

Econometrics

Research Areas

Econometrics

Publication

Journal of Applied Econometrics

Volume

33

Issue

6

First Page

797

Last Page

815

ISSN

0883-7252

Identifier

10.1002/jae.2632

Publisher

Wiley

Copyright Owner and License

Authors

Additional URL

https://doi.org/10.1002/jae.2632

Included in

Econometrics Commons

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