Sampling variability: some observations from a labour supply equation
Abstract:In economics, the number of observations available for empirical work is often predetermined. Researchers assume some large sample distribution and carry through with measurement and testing applied to data sets of varying sizes. The consequences of sampling variability are generally ignored. It is shown in a re-sampling experiment, using data sets of different sizes and estimating log-linear male labour supply equations, that a wide range of what appears to be statistically supported estimates of the wage elasticity of labour supply are generated. Testing based on bootstrapped estimates shows that 4000 observations are required to reduce sampling variability to statistically acceptable levels.
Document Type: Research Article
Affiliations: 1: Department of Economics, The University of Calgary, 2500 University Drive NW, Calgary, Alberta T2N 1N4, Canada 2: Department of Economics, Dalhousie University, Halifax, Nova Scotia B3H 3J5, Canada
Publication date: October 10, 2005