TY  - JOUR
AU  - Griliches,Zvi
AU  - Hausman,Jerry A.
TI  - Errors in Variables in Panel Data
JF  - National Bureau of Economic Research Technical Working Paper Series
VL  - No. 37
PY  - 1984
Y2  - May 1984
UR  - http://www.nber.org/papers/t0037
L1  - http://www.nber.org/papers/t0037.pdf
N1  - Author contact info:
Zvi Griliches
E-Mail: N/A user is deceased

Jerry A. Hausman
Department of Economics
MIT, Room E52-271A
50 Memorial Drive
Cambridge, MA  02139
Tel: 617/253-3644
Fax: 617/253-1330
E-Mail: jhausman@mit.edu
AB  - Panel data based on various longitudinal surveys have become ubiquitous in economics in recent years. Estimation using the analysis of covariance approach allows for control of various "individual effects" by estimation of the relevant relationships from the "within" dimension of the data. Quite often, however, the "within" results are unsatisfactory, "too low" and insignificant. Errors of measurement in the independent variables whose relative importance gets magnified in the within dimension are often blamed for this outcome. However, the standard errors-in-variables model has not been applied widely, partly because in the usual micro data context it requires extraneous information to identify the parameters of interest. In the panel data context a variety of errors-in-variables models may be identifiable and estimable without the use of external instruments. We develop this idea and illustrate its application in a relatively simple but not uninteresting case: the estimation of "labor demand" relationships, also known as the "short run increasing returns to scale" puzzle.
ER  -