Journal of Economic and Social Measurement - Volume 38, issue 3

Authors: Djolov, George

Article Type: Research Article

Abstract: This article examines whether the Herfindahl-Hirschman Index (HHI) is a reliable decision-making tool of business concentration. The statistical properties of the index are considered in order to facilitate an improved statistical decision-making with the index. A misinformed application of the …HHI as to its statistical characteristics has encouraged questionable uses and applications of the index. It has also limited its potential uses. Understanding the statistical nature of the HHI reveals that there is more to this index than known heretofore. Show more

Keywords: Business concentration, Herfindahl-Hirschman Index, relative variability

DOI: 10.3233/JEM-130379

Citation: Journal of Economic and Social Measurement, vol. 38, no. 3, pp. 201-227, 2013

Authors: Gittleman, Maury | Pierce, Brooks

Article Type: Research Article

Abstract: The measurement of inter-industry pay differentials and the resulting use of this information to assess the empirical relevance of different labor market theories have been hampered by the fact that measures of total compensation – as opposed to just wages …and salaries – are not available in the datasets traditionally used. We improve upon past measures of inter-industry pay differentials by being the first, to our knowledge, to incorporate microdata on nonwage compensation. Such compensation can easily exceed 40 to 50 percent of wages and thus its inclusion may either diminish or amplify measured industry pay differences. Using the Employer Costs for Employee Compensation (ECEC) data produced by the U.S. Bureau of Labor Statistics, we find that the inclusion of benefits increases industry dispersion by 16 percent when no controls are included and by an even greater 30 percent when controls are included. Show more

Keywords: Inter-industry wage structure, compensation

DOI: 10.3233/JEM-130378

Citation: Journal of Economic and Social Measurement, vol. 38, no. 3, pp. 229-242, 2013

Authors: Fisher, Jonathan D. | Houseworth, Christina A.

Article Type: Research Article

Abstract: A common caveat often accompanying results relying on household surveys regards respondent error. There is research using administrative data to estimate the extent of error, the correlates of error, and potential corrections for the error. The authors investigate measurement error …in occupation classification in the Current Population Survey (CPS) using the panel component of the CPS to identify those who incorrectly report changing occupation. We find evidence that individuals are inflating their occupation to higher skilled and higher paying occupations than the ones they actually perform. Occupation inflation biases the education and race coefficients in standard Mincer equation results within occupations. Show more

Keywords: Measurement error, occupation, mincer equation, C80

DOI: 10.3233/JEM-130377

Citation: Journal of Economic and Social Measurement, vol. 38, no. 3, pp. 243-261, 2013

Authors: Stewart, Jay

Article Type: Research Article

Abstract: Time-diary surveys collect detailed information about individuals' activities over a short period of time, typically one day. Thus, it is common to see zero time spent in many activities, even for individuals who regularly do the activity. Because of the …large number of zeros, Tobit would seem to be the natural approach. However, once it is recognized that these zeros arise not from censoring, but from a mismatch between the reference period of the data (the diary day) and the period of interest (typically much longer than a day), it is not clear that Tobit is appropriate. I examine the bias associated with alternative procedures for estimating the marginal effects of covariates on time use. I begin by adapting the infrequency of purchase model to time-diary data and showing that OLS estimates are unbiased. Next, using simulated data, I examine the bias associated with three procedures that are commonly used to analyze time-diary data – Tobit, the Cragg [11] two-part model, and OLS. I find that the estimated marginal effects from Tobit are biased and that the bias increases with the fraction of zero-value observations. The two-part model performs significantly better, but generates biased estimates when the number of zeros is a function of the covariates. Only OLS generates unbiased estimates in all of the simulations considered here. Show more

Keywords: Tobit, two-step estimation, OLS, time-use data, C34

DOI: 10.3233/JEM-130376

Citation: Journal of Economic and Social Measurement, vol. 38, no. 3, pp. 263-290, 2013