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Estimating Dynamic Panel Data Models in Political Science

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  • Wawro, Gregory

Abstract

Panel data are a very valuable resource for finding empirical solutions to political science puzzles. Yet numerous published studies in political science that use panel data to estimate models with dynamics have failed to take into account important estimation issues, which calls into question the inferences we can make from these analyses. The failure to account explicitly for unobserved individual effects in dynamic panel data induces bias and inconsistency in cross-sectional estimators. The purpose of this paper is to review dynamic panel data estimators that eliminate these problems. I first show how the problems with cross-sectional estimators arise in dynamic models for panel data. I then show how to correct for these problems using generalized method of moments estimators. Finally, I demonstrate the usefulness of these methods with replications of analyses in the debate over the dynamics of party identification.

Suggested Citation

  • Wawro, Gregory, 2002. "Estimating Dynamic Panel Data Models in Political Science," Political Analysis, Cambridge University Press, vol. 10(1), pages 25-48, January.
  • Handle: RePEc:cup:polals:v:10:y:2002:i:01:p:25-48_00
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    1. Justesen, Mogens K., 2008. "The effect of economic freedom on growth revisited: New evidence on causality from a panel of countries 1970-1999," European Journal of Political Economy, Elsevier, vol. 24(3), pages 642-660, September.
    2. Fang Liu & Peng Zhang & Ibrahim Erkan & Dylan S. Small, 2017. "Bayesian inference for random coefficient dynamic panel data models," Journal of Applied Statistics, Taylor & Francis Journals, vol. 44(9), pages 1543-1559, July.
    3. Ahmet Faruk Aysan & Yavuz Selim Hacihasanoglu, 2007. "Investigation on the Determinants of Turkish Export-Boom in 2000s," Working Papers 2007/19, Bogazici University, Department of Economics.
    4. Raffaella Santolini, 2017. "Electoral Rules And Public Spending Composition: The Case Of Italian Regions," Contemporary Economic Policy, Western Economic Association International, vol. 35(3), pages 551-577, July.
    5. Joseph, Kelli L., 2010. "The politics of power: Electricity reform in India," Energy Policy, Elsevier, vol. 38(1), pages 503-511, January.
    6. Zuzana Ringlerova, 2015. "Weathering the crisis: Evidence of diffuse support for the EU from a six-wave Dutch panel," European Union Politics, , vol. 16(4), pages 558-576, December.
    7. Kroh, Martin & Selb, Peter, 2009. "Inheritance and the Dynamics of Party Identification," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 31(4), pages 559-574.
    8. Irena Jindrichovska & Erginbay Ugurlu & Dana Kubickova, 2013. "Changes in Capital Structure of Czech SMEs: A Dynamic Panel Data Approach," Ekonomika a Management, Prague University of Economics and Business, vol. 2013(3), pages 6-26.
    9. Christos Axioglou & Nicos Christodoulakis, 2019. "Which firms survive in a crisis? Corporate dynamics in Greece 2001-2014," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 133, Hellenic Observatory, LSE.
    10. Wong, Linda & van Kooten, G. Cornelis & Clarke, Judith A., 2012. "The Impact of Agriculture on Waterfowl Abundance: Evidence from Panel Data," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 37(2), pages 1-14, August.
    11. Khan, Umair & Khalid, Umair & Farooq, Fatima, 2021. "Endogeneity Quagmire Empirical Evidence from Telecommunication Industry of Pakistan," Journal of Accounting and Finance in Emerging Economies, CSRC Publishing, Center for Sustainability Research and Consultancy Pakistan, vol. 7(4), pages 955-967, December.
    12. Hecock, R. Douglas & Jepsen, Eric M., 2013. "Should Countries Engage in a Race to the Bottom? The Effect of Social Spending on FDI," World Development, Elsevier, vol. 44(C), pages 156-164.
    13. Raffaella SANTOLINI, 2013. "Electoral rules and public expenditure composition: Evidence from Italian regions," Working Papers 396, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    14. Shanna Rose, 2006. "Do fiscal rules dampen the political business cycle?," Public Choice, Springer, vol. 128(3), pages 407-431, September.
    15. Özler, Sule & Taymaz, Erol & YIlmaz, Kamil, 2009. "History Matters for the Export Decision: Plant-Level Evidence from Turkish Manufacturing Industry," World Development, Elsevier, vol. 37(2), pages 479-488, February.
    16. Buchen, Clemens, 2010. "Emerging economic systems in Central and Eastern Europe – a qualitative and quantitative assessment," EconStor Theses, ZBW - Leibniz Information Centre for Economics, number 37141, January.
    17. Shinta R. I. Soekro & Triono Widodo, 2015. "Mapping And Determinants Of Intra-Asean Foreign Direct Investment (FDI): Indonesia Case Study," Working Papers WP/12/2015, Bank Indonesia.
    18. Lanny W. Martin & Georg Vanberg, 2020. "Coalition Government, Legislative Institutions, and Public Policy in Parliamentary Democracies," American Journal of Political Science, John Wiley & Sons, vol. 64(2), pages 325-340, April.
    19. Christos Axioglou & Nicos Christodoulakis, 2021. "Which firms survive in a crisis? Investigating Gibrat’s Law in Greece 2001–2014," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 48(2), pages 159-217, June.
    20. Ines Abdelkafi & Sahar Loukil & YossraBen Romdhane, 2023. "Economic Uncertainty During COVID-19 Pandemic in Latin America and Asia," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(2), pages 1582-1601, June.
    21. Stephan Kaplan, 2016. "partisan Technocratic Cycles in Latin America," Working Papers 2016-28, The George Washington University, Institute for International Economic Policy.
    22. Abdulkarim M. Meraya & Nilanjana Dwibedi & Xi Tan & Kim Innes & Sophie Mitra & Usha Sambamoorthi, 2018. "The dynamic relationships between economic status and health measures among working‐age adults in the United States," Health Economics, John Wiley & Sons, Ltd., vol. 27(8), pages 1160-1174, August.

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