Measurement error in imputation procedures Articles uri icon

authors

  • CAMPOS, RODOLFO GUILLERMO
  • REGGIO OJEDA, ILIANA GABRIELA

publication date

  • February 2014

start page

  • 197

end page

  • 202

issue

  • 2

volume

  • 122

International Standard Serial Number (ISSN)

  • 0165-1765

Electronic International Standard Serial Number (EISSN)

  • 1873-7374

abstract

  • We study how estimators that are used to impute consumption in survey data are inconsistent due to measurement error in consumption. Previous research suggests instrumenting consumption to overcome this problem. We show that, if additional regressors are present, then instrumenting consumption may still produce inconsistent estimators due to the likely correlation between additional regressors and measurement error. On the other hand, low correlations between additional regressors and instruments may reduce bias due to measurement error. We apply our findings by revisiting recent research that imputes consumption data from the CEX to the PSID. (C) 2013 Elsevier B.V. All rights reserved.

subjects

  • Economics

keywords

  • consumption; measurement error; instrumental variables; consumer expenditure survey; panel study of income dynamics; income shocks