Seminar «Multilevel Modeling for Economists: Why, When and How»
IZA-HSE University International Labor Seminar will be held on Tuesday, October 13, 2020 at 16:00 (MSK).
Speaker: Aleksey Oshchepkov (CLMS HSE).
Title: Multilevel Modeling for Economists: Why, When and How
Multilevel modeling (MLM, also known as hierarchical linear modeling, HLM) is a methodological framework widely used in the social sciences to analyze data with a hierarchical structure, where lower units of aggregation are ‘nested’ in higher units, including longitudinal data. In economics, however, MLM is used very rarely. Instead, economists use separate econometric techniques including cluster-robust standard errors and fixed effects models. In this paper, we review the methodological literature and contrast the econometric techniques typically used in economics with the analysis of hierarchical data using MLM. Our review suggests that economic techniques are generally less convenient, flexible, and efficient compared to MLM. The important limitation of MLM, however, is its inability to deal with the omitted variable problem at the lowest level of data, while standard economic techniques may be complemented by quasi-experimental methods mitigating this problem. It is unlikely, though, that this limitation can explain and justify the rare use of MLM in economics. Overall, we conclude that MLM has been unreasonably ignored in economics, and we encourage economists to apply this framework by providing ‘when and how’ guidelines.
Joint paper with Anna Shirokanova (LCSR HSE).
Oshchepkov, Aleksey Y. and Shirokanova, Anna, Multilevel Modeling for Economists: Why, When and How (June 29, 2020). Higher School of Economics Research Paper No. WP BRP 233/EC/2020
Discussant: Malcolm Fairbrother (Umeå universitet).
Working language is English.
Seminar will be online via Zoom
The link to join Zoom: https://zoom.us/j/95183041971
Meeting ID: 951 8304 1971
If you have questions please contact Liliya Gubaidullina ( firstname.lastname@example.org ).