Handling the measurement error problem by means of panel data: Moment methods applied on firm data

Erik Biorn

No B6-1, 10th International Conference on Panel Data, Berlin, July 5-6, 2002 from International Conferences on Panel Data

Abstract: The estimation of a linear equation from panel data with measurement errors is considered. The equation is estimated (I) by methods operating on the equation in differenced period means, and (II) by Generalized Method of Moments (GMM) procedures using (a) the equation in differences with instruments in levels and (b) the equation in levels with instruments in differences. Both difference transformations eliminate unobserved individual heterogeneity. Examples illustrating the input response to output changes for materials and capital inputs from an eight year panel of Norwegian manufacturing firms, are given.

Keywords: Panel; Data.; Errors-in-Variables.; GMM; Estimation.; Factor; Demand.; Returns; to; scale (search for similar items in EconPapers)
JEL-codes: C13 C23 D24 L60 (search for similar items in EconPapers)
Date: 2002-03
New Economics Papers: this item is included in nep-ecm
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