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  5. Mismeasured Variables in Econometric Analysis: Problems from the Right and Problems from the Left

Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

Mismeasured Variables in Econometric Analysis: Problems from the Right and Problems from the Left

  • Jerry Hausman
Journal of Economic Perspectives
vol. 15, no. 4, Fall 2001
(pp. 57–67)
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Abstract

The effect of mismeasured variables in the most straightforward regression analysis with a single regressor variable leads to a least squares estimate that is downward biased in magnitude toward zero. I begin by reviewing classical issues involving mismeasured variables. I then consider three recent developments for mismeasurement econometric models. The first issue involves difficulties in using instrumental variables. A second involves the consistent estimators that have recently been developed for mismeasured nonlinear regression models. Finally, I return to mismeasured left hand side variables, where I will focus on issues in binary choice models and duration models.

Citation

Hausman, Jerry. 2001. "Mismeasured Variables in Econometric Analysis: Problems from the Right and Problems from the Left." Journal of Economic Perspectives, 15 (4): 57–67. DOI: 10.1257/jep.15.4.57

JEL Classification

  • C30 Multiple or Simultaneous Equation Models: General
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