Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/210839 
Authors: 
Year of Publication: 
2018
Series/Report no.: 
CREDIT Research Paper No. 18/01
Publisher: 
The University of Nottingham, Centre for Research in Economic Development and International Trade (CREDIT), Nottingham
Abstract: 
Pseudo-panels allow estimation of panel models when only repeated cross-sections are available. This involves grouping individuals into cohorts and using the cohort means as if they are observations in a genuine panel. Their practical use is constrained by a lack of consensus on how the pseudo-panels should be formed, particularly to address potential sampling error bias. We show that grouping can also create substantial aggregation bias, calling into question how well pseudo-panels can mimic panel estimates. We create two metrics for assessing the grouping process, one for each potential source of bias. If both metrics are above certain recommended values, the biases from aggregation and sampling error are minimised, meaning results can be interpreted as if they were from genuine panels.
Subjects: 
Pseudo-panel
Estimation bias
Sampling error
Aggregation bias
Repeated Cross-Section
Household Surveys
JEL: 
C13
C23
C81
D10
O12
Document Type: 
Working Paper

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