Panel Data Analysis

Abstract

Panel data offer a valuable lens through which social science phenomena can be examined over time. With panel data, we can overcome some of the fundamental problems with conventional cross-sectional analyses by focusing on the within-unit changes rather than the differences between units. This chapter delves into the foundations, recent advancements, and critical issues associated with panel data analysis. The chapter illustrates the basic concepts of random effects (RE) and fixed effects (FE) estimators. Moving beyond the fundamentals, we provide an intuition for various recent developments and advances in the field of panel data methods, paying particular attention to the identification of time-varying treatment effects or impact functions. To illustrate practical application, we investigate how marriage influences sexual satisfaction. While married individuals report a higher sexual satisfaction than un-married respondents (between-comparison), individuals experience a decline in satisfaction after marriage compared to their pre-marital levels (within-comparison).