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Fixed-Effects Vector Decomposition: Properties, Reliability, and Instruments

Published online by Cambridge University Press:  04 January 2017

Thomas Plümper  and
Vera E. Troeger
Thomas Plümper*
Affiliation:
Department of Government, University of Essex, Wivenhoe Park, Colchester CO4 3SQ, UK
Vera E. Troeger
Affiliation:
Department of Government, University of Essex, Wivenhoe Park, Colchester CO4 3SQ, UK
*
e-mail: tpluem@essex.ac.uk (corresponding author)
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Abstract

This article reinforces our 2007 Political Analysis publication in demonstrating that the fixed-effects vector decomposition (FEVD) procedure outperforms any other estimator in estimating models that suffer from the simultaneous presence of time-varying variables correlated with unobserved unit effects and time-invariant variables. We compare the finite-sample properties of FEVD not only to the Hausman-Taylor estimator but also to the pretest estimator and the shrinkage estimator suggested by Breusch, Ward, Nguyen and Kompas (BWNK), and Greene in this symposium. Moreover, we correct the discussion of Greene and BWNK of FEVD's asymptotic and finite-sample properties.

Information

Type
Symposium on Fixed-Effects Vector Decomposition
Information
Political Analysis , Volume 19 , Issue 2 , Spring 2011 , pp. 147 - 164
Copyright
Copyright © The Author 2011. Published by Oxford University Press on behalf of the Society for Political Methodology 

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Footnotes

Authors' note: Supplementary materials for this article are available on the Political Analysis Web site.

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