What you don't see can't hurt you? Panel data analysis and the dynamics of unobservable factors
Monica Hernandez Alava () and
No 2011-13, ISER Working Paper Series from Institute for Social and Economic Research
We investigate the consequences of using time-invariant individual effects in panel data models when the unobservables are in fact time-varying. Using data from the British Offending Crime and Justice panel, we estimate a dynamic factor model of the occurrence of a range of illicit activities as outcomes of young people's development processes.Â This structure is then used to demonstrate that relying on the assumption of time-invariant individual effects to deal with confounding factors in a conventional dynamic panel data model is likely to lead to spurious "gateway" effects linking cannabis use to subsequent hard drug use.
New Economics Papers: this item is included in nep-ecm
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
https://www.iser.essex.ac.uk/research/publications ... ers/iser/2011-13.pdf (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ese:iserwp:2011-13
Ordering information: This working paper can be ordered from
Publications Office, Institute for Social and Economic Research, University of Essex, Wivenhoe Park, Colchester, Essex CO4 3SQ UK
Access Statistics for this paper
More papers in ISER Working Paper Series from Institute for Social and Economic Research Publications Office, Institute for Social and Economic Research, University of Essex, Wivenhoe Park, Colchester, Essex CO4 3SQ UK. Contact information at EDIRC.
Series data maintained by Jonathan Nears ().