Latent grouped structures in panel data: a review

Alessandro Pionati

MPRA Paper from University Library of Munich, Germany

Abstract: Latent group structures in panel data models are a new and powerful approach to deal with unobserved heterogeneity in a parsimonious way. This review, with a special focus on grouped structure in unobservable traits, first analyzes the limits and opportunities of Bonhomme and Manresa (2015a)’s Grouped Fixed Effects (GFE) estimator, also discussing the literature it contributed to create. A rich selection of models enhancing clustered heterogeneity at a slope level, starting from Su et al. (2016a), is then presented. A short section investigates how the applied literature has employed in practice the GFE. Finally, the GFE of Bonhomme et al. (2022) is presented in detail together with its limits and advantages.

Keywords: Grouped Fixed Effects; Fixed Effects; Discrete Heterogeneity (search for similar items in EconPapers)
JEL-codes: C10 C23 (search for similar items in EconPapers)
Date: 2025-03-12
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