Fixed Effects, Invariance, and Spatial Variation in Intergenerational Mobility | Zendy

Gary Chamberlain | Zendy

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Fixed Effects, Invariance, and Spatial Variation in Intergenerational Mobility

Author(s) -

Gary Chamberlain

Publication year - 2016

Publication title -

american economic review

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 16.936

H-Index - 297

eISSN - 1944-7981

pISSN - 0002-8282

DOI - 10.1257/aer.p20161082

Subject(s) - estimator , invariant (physics) , upper and lower bounds , oracle , mathematics , variation (astronomy) , statistics , dimension (graph theory) , space (punctuation) , econometrics , mathematical analysis , computer science , combinatorics , physics , software engineering , astrophysics , mathematical physics , operating system

Chetty et al. (2014) document variation across commuting zones in intergenerational mobility. With over 700 commuting zones, the task of estimating place effects involves a high-dimension parameter space. I develop a fixed-effects model along with an oracle bound on the risk of invariant estimators. The oracle estimator uses an invariant prior, which I have incorporated into a random-effects model to obtain a feasible estimator. This estimator almost achieves the oracle bound over the relevant part of the (fixed-effects) parameter space in the empirical application. There is substantial reduction in risk compared with the least-squares estimator.

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