Working Paper: NBER ID: w17101
Authors: Emanuele Massetti; Robert Mendelsohn
Abstract: Many nonmarket valuation models, such as the Ricardian model, have been estimated using cross sectional methods with a single year of data. Although multiple years of data should increase the robustness of such methods, repeated cross sections suggest the results are not stable. We argue that repeated cross sections do not properly specify the model. Panel methods that correctly specify the Ricardian model are stable over time. The results suggest that many cross sectional methods including hedonic studies and travel cost studies could be enhanced using panel data.
Keywords: Ricardian model; panel data; climate change; agriculture
JEL Codes: Q1; Q12; Q51; Q54
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| traditional Ricardian model using repeated cross sections (C23) | instability in results (C62) |
| panel data methods (C23) | stable results over time (C62) |
| panel data methods (C23) | accurate estimation of welfare impacts of climate change on U.S. agriculture (Q54) |
| repeated cross-sectional analyses (C23) | unreliable estimates of climate coefficients (C51) |
| climate coefficients from panel data models (C23) | more accurate than those from repeated cross sections (C23) |