Panel Analysis for Metric Data

Abstract

A cross-sectional data set refers to observations on a number of individuals at a given time. A time-series data set refers to observations made over time on a given unit. A panel (or longitudinal or temporal cross-sectional) data set follows a number of individuals over time. In recent years empirical studies that use panel data have become common. This is partly because the cost of developing panel or longitudinal data sets is no longer prohibitive. In some cases, computerized matching of existing administrative records can produce inexpensive longitudinal information, such as the Social Security Administration’s Continuous Work History Sample (CWHS). In other cases, valuable longitudinal data bases can be generated by computerized matching of existing administrative and survey data, such as the University of Michigan’s Panel Study of Income Dynamics (PSID) and the U.S. Current Population Survey. Even in cases where the desired longitudinal information can be collected only by initiating new surveys, such as the series of negative income tax experiments in the United States and Canada, the advance of computerized data management systems has made longitudinal data development cost-effective in the last 20 years (Ashenfelter and Solon 1982).