Transcription of Panel Data Analysis — Advantages and Challenges
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Panel Data Analysis — Advantages and Challenges
Sociedad de Estad stica e Investigaci on OperativaTest(0000) , , 63 Panel data Analysis Advantages and ChallengesCheng Hsiao Department of Economics, University of Southern California, USAWang Yanan Institute for Studies in Economics, Xiamen University, ChinaAbstractWe explain the proliferation of Panel data studies in terms of (i) data availability,(ii) the more heightened capacity for modeling the complexity of human behaviorthan a single cross-section or time series data can possiblyallow, and (iii) challeng-ing methodology. Advantages and issues of Panel data modeling are also Words: Panel data , longitudinal data , unobserved heterogeneity,randomeffects, fixed subject classification:62-021 IntroductionPanel data or longitudinal data typically refer to data containing time seriesobservations of a number of individuals.
The collection of panel data is obviously much more costly than the col-lection of cross-sectional or time series data. However, panel data have become widely available in both developed and developing countries. The two most prominent panel data sets in the US are the National Longitudinal SurveysofLaborMarket Experience(NLS)and the University
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