A COMPARISON OF SOME ESTIMATION METHODS FOR HANDLING OMITTED VARIABLES : A SIMULATION STUDY

Omitted variable problem is a primary statistical challenge in various observational studies. Failure to control for the omitted variable bias in any regression analysis can alter the efficiency of results obtained. The purpose of this study is to compare the performance of four estimation methods (...

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Main Author: Amartey, Philomina
Format: Others
Language:English
Published: Uppsala universitet, Statistiska institutionen 2020
Subjects:
Online Access:http://urn.kb.se/resolve?urn=urn:nbn:se:uu:diva-412896
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spelling ndltd-UPSALLA1-oai-DiVA.org-uu-4128962020-06-13T03:31:49ZA COMPARISON OF SOME ESTIMATION METHODS FOR HANDLING OMITTED VARIABLES : A SIMULATION STUDYengAmartey, PhilominaUppsala universitet, Statistiska institutionen2020Social SciencesSamhällsvetenskapOmitted variable problem is a primary statistical challenge in various observational studies. Failure to control for the omitted variable bias in any regression analysis can alter the efficiency of results obtained. The purpose of this study is to compare the performance of four estimation methods (Proxy variable, Instrumental Variable, Fixed Effect, First Difference) in controlling the omitted variable problem when they are varying with time, constant over time and slightly varying with time. Results from the Monte Carlo study showed that, the prefect proxy variable estimator performed better  than the other models under all three cases. The instrument Variable estimator performed better than the Fixed Effect and First Difference estimator except in the case when the omitted variable is constant over time. Also, the Fixed Effect performed better than First Difference estimator when the omitted variable is time-invariant and vice versa when the omitted is slightly varying with time. Student thesisinfo:eu-repo/semantics/bachelorThesistexthttp://urn.kb.se/resolve?urn=urn:nbn:se:uu:diva-412896application/pdfinfo:eu-repo/semantics/openAccess
collection NDLTD
language English
format Others
sources NDLTD
topic Social Sciences
Samhällsvetenskap
spellingShingle Social Sciences
Samhällsvetenskap
Amartey, Philomina
A COMPARISON OF SOME ESTIMATION METHODS FOR HANDLING OMITTED VARIABLES : A SIMULATION STUDY
description Omitted variable problem is a primary statistical challenge in various observational studies. Failure to control for the omitted variable bias in any regression analysis can alter the efficiency of results obtained. The purpose of this study is to compare the performance of four estimation methods (Proxy variable, Instrumental Variable, Fixed Effect, First Difference) in controlling the omitted variable problem when they are varying with time, constant over time and slightly varying with time. Results from the Monte Carlo study showed that, the prefect proxy variable estimator performed better  than the other models under all three cases. The instrument Variable estimator performed better than the Fixed Effect and First Difference estimator except in the case when the omitted variable is constant over time. Also, the Fixed Effect performed better than First Difference estimator when the omitted variable is time-invariant and vice versa when the omitted is slightly varying with time.
author Amartey, Philomina
author_facet Amartey, Philomina
author_sort Amartey, Philomina
title A COMPARISON OF SOME ESTIMATION METHODS FOR HANDLING OMITTED VARIABLES : A SIMULATION STUDY
title_short A COMPARISON OF SOME ESTIMATION METHODS FOR HANDLING OMITTED VARIABLES : A SIMULATION STUDY
title_full A COMPARISON OF SOME ESTIMATION METHODS FOR HANDLING OMITTED VARIABLES : A SIMULATION STUDY
title_fullStr A COMPARISON OF SOME ESTIMATION METHODS FOR HANDLING OMITTED VARIABLES : A SIMULATION STUDY
title_full_unstemmed A COMPARISON OF SOME ESTIMATION METHODS FOR HANDLING OMITTED VARIABLES : A SIMULATION STUDY
title_sort comparison of some estimation methods for handling omitted variables : a simulation study
publisher Uppsala universitet, Statistiska institutionen
publishDate 2020
url http://urn.kb.se/resolve?urn=urn:nbn:se:uu:diva-412896
work_keys_str_mv AT amarteyphilomina acomparisonofsomeestimationmethodsforhandlingomittedvariablesasimulationstudy
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