IDEAS home Printed from https://ideas.repec.org/h/eme/aecozz/s0731-9053(2009)0000024014.html
   My bibliography  Save this book chapter

Distribution dynamics and measurement error

In: Measurement Error: Consequences, Applications and Solutions

Author

Listed:
  • Ole Rummel

Abstract

This chapter presents a model of distribution dynamics in the presence of measurement error in the underlying data. Studies of international growth convergence generally ignore the fact that per capita income data from the Penn World Table (PWT) are not only continuous variables but also measured with error. Together with short-time scale fluctuations, measurement error makes inferences potentially unreliable. When first-order, time-homogeneous Markov models are fitted to continuous data with measurement error, a bias towards excess mobility is introduced into the estimated transition probability matrix. This chapter evaluates different methods of accounting for this error. An EM algorithm is used for parameter estimation, and the methods are illustrated using data from the PWT Mark 6.1. Measurement error in income data is found to have quantitatively important effects on distribution dynamics. For instance, purging the data of measurement error reduces estimated transition intensities by between one- and four-fifths and more than halves the observed mobility of countries.

Suggested Citation

  • Ole Rummel, 2009. "Distribution dynamics and measurement error," Advances in Econometrics, in: Measurement Error: Consequences, Applications and Solutions, pages 251-279, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:aecozz:s0731-9053(2009)0000024014
    DOI: 10.1108/S0731-9053(2009)0000024014
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/S0731-9053(2009)0000024014/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/S0731-9053(2009)0000024014/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/S0731-9053(2009)0000024014/full/epub?utm_source=repec&utm_medium=feed&utm_campaign=repec&title=10.1108/S0731-9053(2009)0000024014
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/S0731-9053(2009)0000024014?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:aecozz:s0731-9053(2009)0000024014. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.