 Estimating heterogeneous effects: Applications to labor economicsStéphane Bonhomme and Angela Denis Labour Economics, 2024, vol. 91, issue C Abstract: A growing number of applications involve settings where, in order to infer heterogeneous effects, a researcher compares various units. Examples of research designs include children moving between different neighborhoods, workers moving between firms, patients migrating from one city to another, and banks offering loans to different firms. We present a unified framework for these settings, based on a linear model with normal random coefficients and normal errors. Using the model, we discuss how to recover the mean and dispersion of effects, other features of their distribution, and to construct predictors of the effects. We provide moment conditions on the model’s parameters, and outline various estimation strategies. A main objective of the paper is to clarify some of the underlying assumptions by highlighting their economic content, and to discuss and inform some of the key practical choices. Keywords: Heterogeneity; Neighborhoods; Firms; Workers; Variance components; Shrinkage (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:91:y:2024:i:c:s0927537124001349 DOI: 10.1016/j.labeco.2024.102638 Access Statistics for this article Labour Economics is currently edited by A. Ichino More articles in Labour Economics from Elsevier |
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