Estimating Dynamic Panel Data Models in Political Science

Abstract

Panel data are a very valuable resource for finding empirical solutions to political science puzzles. Yet numerous published studies in political science that use panel data to estimate models with dynamics have failed to take into account important estimation issues, which calls into question the inferences we can make from these analyses. The failure to account explicitly for unobserved individual effects in dynamic panel data induces bias and inconsistency in cross-sectional estimators. The purpose of this paper is to review dynamic panel data estimators that eliminate these problems. I first show how the problems with cross-sectional estimators arise in dynamic models for panel data. I then show how to correct for these problems using generalized method of moments estimators. Finally, I demonstrate the usefulness of these methods with replications of analyses in the debate over the dynamics of party identification.

The Tertiary Tilt: Education and Inequality in the Developing World

“…After performing these simple transformations, we estimate the full specification using a FGLS random-effects model with robust standard errors. The model takes the form of Equation 3 below, where the within-country coefficients are denoted by the superscript w and μ i and ε i,t are respectively the between-and within-country components of the error term: 20 The analysis of TSCS data has been the source of productive debate within both economics and political science (Beck, 2001;Zorn, 2001;Wawro, 2002;Hsiao, 2003;Baltagi, 2005).…”

Inheritance and the Dynamics of Party Identification

“…In recent years, some scholars have adapted the concepts of 'trait' and 'state dependence' from labor market economics (see Hsiao 2003) to the modeling of partisanship dynamics (Green & Yoon 2002, Wawro 2002, Bartels et al 2005.…”

Stability and Change in Party Preference

“…More frequently analysed with panel data is the stability of party identification, where the question whether party identification reacts to short term influences is subject to an extensive debate (e.g. Falter et al 2000;Green and Yoon 2002;Wawro 2002;Clarke et al 2004;Arzheimer and Schoen 2005;Schmitt-Beck et al 2006).…”