Inference for Rank-Rank Regressions

Denis Chetverikov and Daniel Wilhelm

Papers from arXiv.org

Abstract: The slope coefficient in a rank-rank regression is a popular measure of intergenerational mobility. In this article, we first show that commonly used inference methods for this slope parameter are invalid. Second, when the underlying distribution is not continuous, the OLS estimator and its distribution may be sensitive to how ties in the ranks are handled. Motivated by these findings we derive the asymptotic distribution of the OLS estimator and provide valid inference methods for a general class of rank-rank regression specifications.

Date: 2023-10, Revised 2026-08
New Economics Papers: this item is included in nep-ecm
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