# Tag Info

### How much do second-hand good purchases affect first-hand demand?

Coase (1972) has a classic treatments of this issue for monopolists selling durable goods. The general idea is that if Alice sells a textbook to Bob, Bob can resell it to Charlie when he is done with ...
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### Citing non-economics studies in an economics research paper

As long as the main results/conclusions of your paper don't rely solely on the non-economics literature you cite, you should be okay. In other words, it's perfectly fine to use non-economics ...
• 14.3k
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### What does it mean to make an identification assumption?

Identifying assumption: assumptions made about the DGP that allows you to draw causal inference. E.g. exogeneity assumption for IV, parallel trends assumption in diff-in-diff. Identifying assumptions ...
• 2,559
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### Cobb-Douglas production function with expenditures rather than units

Sure you can, just that your interpretation of your variables in your analysis changes however. In this case you are analyzing how investment in differing factors of production affect output. I'd ...
• 7,685
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### Why the larger the sample, the lower standard deviation?

Intuitively, variables that only vary at the group level should have a lower variance (and therefore lower standard deviation) than comparable variables that vary at the individual level. As these ...
• 8,737
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### What are some good repositories for economic data

Be more specific on what you need. Quandl would be a pretty general source which hasn't been mentioned yet. For macro data the St. Louis Fed is pretty good and thorough. Eurostat for European data. ...

### Citing non-economics studies in an economics research paper

There seem to be two things: The first is that "perceived value" is not something that directly corresponds to something economists usually study. It might be related to, say, marriage ...
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### Why we need at least 40 groups to be properly clustered?

First of all, clustering only changes the (estimated) standard deviations of your coefficients. Whether you cluster or not will not change the coefficients themselves and therefore also not the "...
• 8,737
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### Including an endogenous covariate in a regression model as a control to estimate the effect of another variable of interest

If I include $z_1$ in the model, like this: $$> y = \beta_0 + \beta_1 x + \beta_2 z_1 + e, >$$ Does that mean that $\beta_1$ is predominantly capturing the effect of $z_2$? Yes. This can be ...
• 8,737
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• 15.9k
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### How should one determine the proper number of lags in a time series regression?

I don't have advice specific to error correcting model (ECM) setting, but in undergraduate applied econometric class they gave us the generic advice to continue to extend lags in the model until the ...
• 15.9k
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### Difference-in-differences in 2SLS regression

Well, if you believe that treatment is endogenous (which depends on the problem at hand here and is not an inherent feature of the model), then using eligibility as an instrumental variable will help ...
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### What is a good proxy for government quality?

Using corruption is part of it but a bit restrictive way to measure government "quality". You may use aggregate indicators as the one developed by the Worldwide Governance Indicators (WGI) project ...
• 6,652
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### Is there empirical evidence on usability of Cobb-Douglas production function?

The simple answer to why the Cobb-Douglas functional form is used is because it is at least a log-linear approximation to some higher-order production function. That is, suppose you take a functional ...
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### Identifying assumption meaning

"Identification" is the most loaded term in econometrics. There are multiple cheap talk equilibria with regard to its meaning. It is used with different intended (but related and overlapping)...
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### What does it mean to make an identification assumption?

Maybe another example will help here: Imagine you would like to know the effect of smoking on the probability of getting cancer. By simply comparing cancer rates of smokers and non-smokers you might ...
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### Are there conventions in economics for coding the distance between states?

I think the answer depends on who is impacted by your measure of distance and for what purpose. Kennan and Walker (2011) Econometrica measure distance between states as "the great circle distance ...
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### What are some good repositories for economic data

The Bureau of Economic Analysis (BEA) is the primary source for US economic data. Other US sources include the Dept of Labor, The Census Bureau, Dept of Commerce, and the US Energy Information ...
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### Dealing with Missing Data when Testing the CAPM

Easiest fix: if you're worried about it you should value weight your results. This is suggest by, for instance, Kothari, Shanken and Sloan (1995). Firms that are delisted tend to have extremely small ...
• 1,996
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### How to interpret "scale efficiency" in DEA?

First of all, let me tell you that you're doing great. I remember that, being a non-parametric method, it was more difficult for me to understand even the simplest things of DEA. Now, your ...
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### Omitted variables in gravity model

The omitted variable bias in gravity model is an important issue given that some factors are unobserved or difficult to quantity. To solve this issue trade economists tend to rely on various fixed ...
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### Estimating CES utility (not production) function parameters

This answer closely follows the logic of estimation of translog cost function presented in Section 4.7 of Fumio Hayashi's "Econometrics". Define for convenience the CES aggregate price index ...
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### Why we need at least 40 groups to be properly clustered?

First, that is only a rule of thumb, exact number of clusters you need in any case is context dependent. Second, actually as pointed out by Cameron et al (2008): A practical limitation of inference ...
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