Econometrics of Mismeasured Data
Saturday, Jan. 7, 2017 8:00 AM – 10:00 AM
Hyatt Regency Chicago, Toronto
- Chair: Rusty Tchernis, Georgia State University
On the Estimation of Average Treatment Effects With Endogenous Misreporting
AbstractParticipation in social programs is often misreported in survey data, complicating the estimation of the effects of those programs. In this paper we propose a model to estimate treatment effect under endogenous participation and endogenous misreporting. We show that failure to account for endogenous misreporting can result in the estimates of the treatment effect having opposite sign from the true effect. We present an expression for the asymptotic bias of both OLS and IV estimators and discuss the conditions under which sign reversal may occur. We provide a method of eliminating this bias when researchers have access to information related to both participation and misreporting. We establish the consistency and asymptotic normality of our estimator and present its small sample performance through Monte Carlo simulations.
Are Proxy Earnings Reports Reliable? Evidence From the Current Population Survey
AbstractThe Current Population Survey (CPS) typically relies on a single householder to provide responses for all household members. Roughly half of all earnings reports are from these “proxy” respondents, making their reliability a question of some importance. Cross-section estimates of proxy effects on reported earnings suggest a modest negative effect of about 2%, but these results mask what are large differences for non-spousal versus spousal proxy reports and, to a lesser degree, among wives’ reports for husbands and husbands’ reports for wives. Our research examines the accuracy of proxy reports using two types of data and approaches. Longitudinal evidence from CPS public use files identify proxy reporting effects based on workers who self-report in one year and have a proxy report in a second year. Using internal Current Population Survey (CPS ASEC) records matched to administrative data on earnings, we replicate CPS cross-section results using the administrative earnings data regressed on the proxy status from the survey. If the coefficient on proxy reflects response error in the CPS, there should be no correlation between proxy and earnings in the administrative data. Both CPS panel data and administrative data lead to the conclusion that proxy response is correlated with earnings, conditioning on covariates, but this correlation largely reflects unmeasured worker heterogeneity and not misreporting of earnings. Broadly speaking, proxy earnings reports are reliable, the exception being modest underreporting of husbands’ earnings by their wives.
University of Michigan
University of Arizona
University of Chicago
- C1 - Econometric and Statistical Methods and Methodology: General
- C8 - Data Collection and Data Estimation Methodology; Computer Programs