The (closely related) benefit is that we can get by without panel data, using instead only a relatively limited set of data obtainable from repeated cross-sectional surveys of household expenditures, of the sort that many countries conduct in order, for example, to compute consumer price indexes

We contrast two approaches to the prediction of latent variables in the model of factor analysis. The likelihood statistic is a sufficient statistic for the unobservables when sampling arises from the exponential family of distributions. Linear predictors, on the other hand, can be obtained as...