Identification of time-varying transformation models with fixed effects, with an application to unobserved heterogeneity in resource shares

Irene Botosaru, Chris Muris and Krishna Pendakur

Journal of Econometrics, 2023, vol. 232, issue 2, 576-597

Abstract: We provide new results showing identification of a large class of fixed-T panel models, where the response variable is an unknown, weakly monotone, time-varying transformation of a latent linear index of fixed effects, regressors, and an error term drawn from an unknown stationary distribution. Our results identify the transformation, the coefficient on regressors, and features of the distribution of the fixed effects. We then develop a full-commitment intertemporal collective household model, where the implied quantity demand equations are time-varying functions of a linear index. The fixed effects in this index equal logged resource shares, defined as the fractions of household expenditure enjoyed by each household member. Using Bangladeshi data, we show that women’s resource shares decline with household budgets and that half of the variation in women’s resource shares is due to unobserved household-level heterogeneity.

Keywords: Panel data; Fixed effects; Time-varying transformation; Collective household; Resource shares (search for similar items in EconPapers)
JEL-codes: C14 C23 C41 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0304407621002633
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Identification of Time-Varying Transformation Models with Fixed Effects, with an Application to Unobserved Heterogeneity in Resource Shares (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:econom:v:232:y:2023:i:2:p:576-597

DOI: 10.1016/j.jeconom.2021.11.006

Access Statistics for this article

Journal of Econometrics is currently edited by T. Amemiya, A. R. Gallant, J. F. Geweke, C. Hsiao and P. M. Robinson

More articles in Journal of Econometrics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().