The Loss in Efficiency from Using Grouped Data to Estimate Coefficients of Group Level Variables
نویسندگان
چکیده
We derive the efficiency loss from using grouped data to estimate coefficients of variables that vary across groups but not individuals within a group (e.g., state unemployment rates) when micro data are unavailable on the dependent variable. We present an empirical example of our theoretical results, and show that the efficiency loss in this application is small. JEL Classification Number C10.
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