Collecting Panel Data in Developing Countries: Does It Make Sense?
There is no difference in principle between developing and developed countries in deciding whether it is desirable to collect panel data. However, there are many relevant circumstantial differences in developing countries. A number of aspects of the collection and use of panel data from developing country households are reviewed. Sampling issues are discussed in Section 1. The authors conclude that there are likely to be real, if modest, benefits from incorporating some panel element into household survey data collection in developing countries. The recognition that panel data are likely to be subject to substantial errors of measurement does not invalidate this conclusion. Section 2 discusses the measurement of income dynamics, an issue that cannot be addressed without panel data. Recent research using U.S. data is reviewed to show that comparable work for developing countries would add an important dimension to discussions of poverty, inequality, and development. It is in the third area of review, that of econometric analysis, that the real benefits of panel data appear most fragile. These issues are discussed in Section 3. While it is true that panel data offer the unique ability to deal with the contamination of econometric relationships by unobservable fixed effects, the presence of measurement error can compromise the quality of the estimates to the point where it is unclear whether cross-section or panel estimators are superior. This situation is in sharp contrast to that for sampling where errors of measurement typically cannot reverse the superiority of panel over cross-section estimators. The document concludes with the argument that panel data should be collected in both developing and developed countries. (Author/BZ)
What people are saying - Write a review
We haven't found any reviews in the usual places.
Econometric Analysis of Panel Data
1 other sections not shown
Abowd and Card Altonji Ashenfelter and Ham attrition autocorrelation benefits of panel bias change in log Change in Real collecting panel data consumption cost covariance data collection Data in Developing developing countries discretionary income Duncan econometric analysis Engel curves equation errors of measurement example fixed effects households Let important income dynamics income mobility independent cross-sections individuals instrumental variables intertemporal labor supply interviews issues labor supply elasticity life-cycle labor supply Lillard and Willis Living Standards Measurement log hours log wages longitudinal data LSMS mean in period measurement error MEMRB Michigan PSID observations overstated panel design panel element panel estimator percent permanent income population possible poverty precision presence of measurement problem PSID data random regression coefficient reports rotating panel rotation group sampling errors serial correlation Standards Measurement Study statistical successive waves Surveys in Developing TABLE A.l tend typically unemployment variance wage change wage rate World Bank