What to Do (and Not Do) with Time-Series Criss-Section Data

American Political Science Review, Vol. 89, No. 3, September 1995

14 Pages Posted: 15 Aug 2010

See all articles by Nathaniel Beck

Nathaniel Beck

New York University (NYU) - Wilf Family Department of Politics

Jonathan N. Katz

California Institute of Technology - Division of the Humanities and Social Sciences

Date Written: August 13, 2010

Abstract

We examine some issues in the estimation of time-series cross-section models, calling into question the conclusions of many published studies, particularly in the field of comparative political economy. We show that the generalized least squares approach of Parks produces standard errors that lead to extreme overconfidence, often underestimating variability by 50% or more. We also provide an alternative estimator of the standard errors that is correct when the error structures show complications found in this type of model. Monte Carlo analysis shows that these “panel-corrected standard errors” perform well. The utility of our approach is demonstrated via a reanalysis of one “social democratic corporatist” model.

Keywords: panel, time-series cross-section, econometrics

Suggested Citation

Beck, Nathaniel and Katz, Jonathan N., What to Do (and Not Do) with Time-Series Criss-Section Data (August 13, 2010). American Political Science Review, Vol. 89, No. 3, September 1995, Available at SSRN: https://ssrn.com/abstract=1658640 or http://dx.doi.org/10.2139/ssrn.1658640

Nathaniel Beck

New York University (NYU) - Wilf Family Department of Politics ( email )

715 Broadway
New York, NY 10003
United States

Jonathan N. Katz (Contact Author)

California Institute of Technology - Division of the Humanities and Social Sciences ( email )

1200 East California Blvd.
Pasadena, CA 91125
United States
626-395-4191 (Phone)

HOME PAGE: http://jkatz.caltech.edu

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