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Panel and Pseudo-Panel Estimation of Cross-Sectional and Time Series Elasticities of Food Consumption: The Case of American and Polish Data

François Gardes, Greg Duncan (), Patrice Gaubert (), Marc Gurgand and Christophe Starzec

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: The problem addressed in this article is the bias to income and expenditure elasticities estimated on pseudo-panel data caused by measurement error and unobserved heterogeneity. We gauge empirically these biases by comparing cross-sectional, pseudo-panel and true panel data from both Polish and American expenditure surveys. Our results suggest that unobserved heterogeneity imparts a downward bias to cross-section estimates of income elasticities of at-home food expenditures and an upward bias to estimates of income elasticities of away-from-home food expenditures. "Within" and first-difference estimators suffer less bias, but only if the effects of measurement error are accounted for with instrumental variables.

Keywords: individual and grouped data; unobserved heterogeneity; AIDS model (search for similar items in EconPapers)
Date: 2005-04
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00176109
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Published in Journal of business & economic statistics, 2005, 23 (2), pp.242-253. ⟨10.1198/073500104000000587⟩

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Working Paper: Panel and Pseudo-Panel Estimation of Cross-Sectional and Time Series Elasticities of Food Consumption: The Case of American and Polish Data (2005) Downloads
Working Paper: Panel and Pseudo-Panel Estimation of Cross-Sectional and Time Series Elasticities of Food Consumption: The Case of American and Polish Data (2002) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:hal-00176109

DOI: 10.1198/073500104000000587

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