Spatial effects and common-shocks effects are of increasing empirical importance. Each type of effect has been analyzed separately in a growing literature. This paper considers a joint modeling of both types. Joint modeling allows one to determine whether one or both of these effects are...

Child birth leads to a break in a woman's employment history and is considered one reason for the relatively poor labor market outcomes observed for women compared to men. However, the time spent at home after child birth varies significantly across mothers and is likely driven by observed and,...

This paper investigates efficient estimation of heterogeneous coefficients in panel data models with common shocks, which have been a particular focus of recent theoretical and empirical literature. We propose a new two-step method to estimate the heterogeneous coefficients. In the first step,...

This paper tests a series of prominent hypotheses regarding the determinants of per-capita income using a novel spatial econometric approach to control for spillovers among neighboring countries and for spatially correlated omitted variables. We use simultaneous equations to identify alternative...

Dealing with endogenous regressors is a central challenge of applied research. The standard solution is to use instrumental variables that are assumed to be uncorrelated with unobservables. We instead assume (i) the correlation between the instrument and the error term has the same sign as the...

This paper, in using cross-section pooled logit, probit, and fixed-effects logit models, empirically explores the main factors affecting the rescheduling of contractual debt-service payments by heavily indebted poor countries (HICPs) in the late 1980s and the 1990s. The results seem to suggest...

The problem addresses in this article is the bias to income and expenditure elasticity estimates caused by inattention to measurement error and unobserved heterogeneity. We gauge these biases by comparing cross-sectional, pseudo-panel and true panel data from Polish and American expenditure surveys.

This paper considers the statistical analysis of large panel data sets where even after conditioning on common observed e¤ects the cross section units might remain dependently distributed. This could arise when the cross section units are subject to unobserved common e¤ects and/or if there are...

The following research is guided by the hypothesis that products chosen on a shopping trip in a supermarket can indicate the preference interdependencies between different products or brands. The bundle chosen on the trip can be regarded as the result of a global utility function. More...

We propose two new simple residual-based panel data tests for the null of no cointegration. The tests are simple because they do not require any correction for the temporal dependencies of the data. Yet they are able to accommodate individual specific short-run dynamics, individual specific...