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WORKING PAPER
Problems with and Solutions for Two-dimensional Models of Continuous Dependent Variables
Goodrich, Ben

Abstract
This paper addresses hierarchical models with continuous dependent variables, such as time-series-cross-section models. Building on the argument in Zorn (2001), the main point of this paper is that the pooled OLS estimator is deeply flawed especially for time-series-cross-section data but for reasons that have not explicitly been raised in previous papers. The pooled OLS estimator, the within-estimator, the between-estimator, and the random effects estimator can be seen as special cases of the fractionally pooled estimator presented in Bartels (1996), which allows all of these estimators to be evaluated in a common framework. Taking bias and efficiency into account, using both the within-estimator and the between-estimator is likely to be the best estimation strategy for the vast majority of applications in political science.

Keywords
between estimator
fixed effects
pooled OLS
random effects
TSCS


File
icnPdfMini ProblemsSolutions.pdf


Uploaded
05-24-2005

Document ID Number
485


   
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