Estimation of heterogeneous panels with systematic slope variations

Breitung, Jörg; Salish, Nazarii

doi:10.1016/j.jeconom.2020.04.007

Cited by 21 publications

(29 citation statements)

References 14 publications

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“…Evidently, the above standard fixed-effect model can control the state-specific effects, but suffers from two important shortcomings. First, it assumes the state effect is constant over time; this assumption is unlikely to hold given the consistent change in environmental policy and socioeconomic factors [32,33]. Second, the effects of invariance are integrated, meaning it is unable to answer our research question.…”

Section: Econometric Modellingmentioning

confidence: 98%

“…The alternative strategy is to use a random effect to address this shortcoming, where s i is used to account for the random factors. Unfortunately, the approach has the disadvantage [32,[34][35][36] of assuming that:…”

Section: Econometric Modellingmentioning

confidence: 99%

“…As earlier previously, the fixed effect is applied in empirical research, specifically when controlling for omitted variable bias [32,[37][38][39][40], but has disadvantages. First, it assumes that the error is fixed, which is unlikely to hold due to climate policy change and socioeconomic dynamics.…”

Section: Persistent and Transitory Effects Of Ict On Environmental Impact Assessment In Africamentioning

confidence: 99%

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Decomposing the Persistent and Transitory Effect of Information and Communication Technology on Environmental Impacts Assessment in Africa: Evidence from Mundlak Specification

Shobande

2021

Sustainability

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This study examines the persistent and transitory effects of information and communication technology (ICT) on the environmental impact assessment in Africa. The applied advanced econometrics is based on both the Mundlak and Hausman–Taylor methodology for correcting endogeneity and the feasible generalized least squares (FGLS) method to identify any potential cross-panel correlation. The empirical evidence suggests that an increase in ICT (Internet penetration) has a positive transitory effect on the environment. On the contrary, an increase in ICT has a negative persistent effect on the environment. This implies that a temporary change in ICT usage increases carbon emissions, whereas ICT use can reduce carbon emissions in the long run. In addition, this study identified mediums through which ICT can affect the environment, such as energy consumption. Therefore, this study recommends continuous investment in ICT infrastructure and education on the importance of practicing environmentally sustainable practices. Similarly, energy conservation is critical because use of the Internet appears to indirectly increase energy usage by increasing the overall productivity of the economy, which may subsequently degrade the environment.

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Section: Econometric Modellingmentioning

confidence: 98%

Section: Econometric Modellingmentioning

confidence: 99%

Section: Persistent and Transitory Effects Of Ict On Environmental Impact Assessment In Africamentioning

confidence: 99%

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Decomposing the Persistent and Transitory Effect of Information and Communication Technology on Environmental Impacts Assessment in Africa: Evidence from Mundlak Specification

Shobande

2021

Sustainability

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“…The fixed coefficients assumption is arguably more general than the random coefficients assumption as it allows for correlation between the group-specific parameters and the explanatory variables. As shown by Breitung and Salish (2020) in the case of correlated coefficients, homogeneous estimators are inconsistent for the expected values of the slope parameters whereas the mean group estimators are generally consistent. As they impose homogeneity within groups, it follows that the partially heterogeneous estimators are inconsistent as well if the slope parameters are fully heterogeneous and correlated with the explanatory variables.…”

Section: Partially Heterogeneous Estimatorsmentioning

confidence: 95%

Heterogeneity and Cross-Sectional Dependence in Panels: Heterogeneous vs. Homogeneous Estimators

Akgun¹,

Pirotte²,

Urga³

2021

Revue d'Économie Politique

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This paper focuses on the comparison of homogeneous and heterogeneous panel data estimators, including partially heterogeneous ones, in presence of cross-sectional dependence generated by common factors and spatial error dependence. Our specifications allow us to consider and contrast weak cross-sectional dependence and strong cross-sectional dependence in a general linear heterogeneous panel data model. An overview of the estimation procedures, including heterogeneous, homogeneous and partially heterogeneous estimators, is presented. Then, an extensive Monte Carlo study is conducted using a general framework encompassing recent contributions in the literature especially in terms of considering common factors and spatial dependence simultaneously. Our simulation results show that, even for small individual and time dimensions, heterogeneous estimators perform better in terms of bias, root mean squared error, size and size adjusted power compared to homogeneous estimators. Last, the superiority of the heterogeneous estimators is confirmed by an empirical application relating fiscal decentralization and government size in 22 OECD countries over the period 1973-2017.

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“…With the mean group estimator, Pesaran et al (1999) presented a solution to biases due to slope heterogeneity more than 20 years ago. More recently, Breitung & Salish (2020) provide an estimation strategy tailor-made for systematic slope heterogeneity.…”

Section: Introductionmentioning

confidence: 99%

Essays on Economic Expectations and Monetary Union Heterogeneity

Schuffels

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Estimation of heterogeneous panels with systematic slope variations

Cited by 21 publications

References 14 publications

Decomposing the Persistent and Transitory Effect of Information and Communication Technology on Environmental Impacts Assessment in Africa: Evidence from Mundlak Specification

Decomposing the Persistent and Transitory Effect of Information and Communication Technology on Environmental Impacts Assessment in Africa: Evidence from Mundlak Specification

Heterogeneity and Cross-Sectional Dependence in Panels: Heterogeneous vs. Homogeneous Estimators

Essays on Economic Expectations and Monetary Union Heterogeneity

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