Two applications of the random coefficient procedure: Correcting for misspecifications in a small area level model and resolving Simpson's paradox

C-Tier
Journal: Economic Modeling
Year: 2015
Volume: 45
Issue: C
Pages: 93-98

Authors (4)

Swamy, P.A.V.B. (not in RePEc) Mehta, J.S. (not in RePEc) Tavlas, G.S. (Bank of Greece) Hall, S.G. (Bank of Greece)

Score contribution per author:

0.251 = (α=2.01 / 4 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We apply a random-coefficient framework to deal with two problems frequently encountered in applied work. First, we use a real-world relationship to derive a sub-relationship among fewer variables without introducing any specification error to correct misspecifications in a small area level model. Second, we then use this framework to resolve Simpson's paradox. We show that this paradox does not arise if a statistical relationship between a pair of variables is derived from the corresponding real-world relationship involving all relevant variables, including the original pair, without introducing a single specification error.

Technical Details

RePEc Handle
repec:eee:ecmode:v:45:y:2015:i:c:p:93-98
Journal Field
General
Author Count
4
Added to Database
2026-01-25