MEASUREMENT ERROR IN MACROECONOMIC DATA AND ECONOMICS RESEARCH: DATA REVISIONS, GROSS DOMESTIC PRODUCT, AND GROSS DOMESTIC INCOME

Andrew C. Chang and Phillip Li ()

Economic Inquiry, 2018, vol. 56, issue 3, 1846-1869

Abstract: We use a preanalysis plan to analyze the effect of measurement error on economics research using the fact that the Bureau of Economic Analysis both revises its gross domestic product (GDP) data and also publishes a second, theoretically identical estimate of U.S. output that only differs from GDP due to measurement error: gross domestic income (GDI). Using a sample of 23 models published in top economics journals, we find that reestimating models using revised GDP always gives the same qualitative result as the original publication. Estimating models using GDI instead of GDP gives a different qualitative result for three of 23 models (13%). (JEL C80, C82, E01)

Date: 2018
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https://doi.org/10.1111/ecin.12567

Related works:
Working Paper: Measurement Error in Macroeconomic Data and Economics Research: Data Revisions, Gross Domestic Product, and Gross Domestic Income (2015)
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