How Much of Observed Economic Mobility is Measurement Error? IV Methods to Reduce Measurement Error Bias, with an Application to Vietnam

• Tác giả: Paul Glewwe
• Ngôn ngữ: eng
• Ký hiệu phân loại: 828.99 English-language literatures not requiring local emphasis
• Thông tin xuất bản: Oxford University Press on behalf of the World Bank, 2013
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 320704
• Chủ đề: 1. autocorrelation; 2. covariance; 3. Econometrics; 4. economic growth; 5. equations

Tóm tắt

 Research on economic growth and inequality inevitably raises issues concerning economic mobility because the relationship between long-run inequality and short-run inequality is mediated by income mobility
  for a given level of short-run inequality, greater mobility implies lower long-run inequality. But empirical measures of both inequality and mobility tend to be biased upward due to measurement error in income and expenditure data collected from household surveys. This paper examines how to reduce or remove this bias using instrumental variable methods, and provides conditions that instrumental variables must satisfy to provide consistent estimates. This approach is applied to panel data from Vietnam. The results imply that at least 15 percent, and perhaps as much as 42 percent, of measured mobility is upward bias due to measurement error. The results also suggest that measurement error accounts for at least 12 percent of measured inequality.