@article{Chen:269326, recid = {269326}, author = {Chen, Mingli}, title = {Estimation of Nonlinear Panel Models with Multiple Unobserved Effects}, address = {2016-03-03}, number = {2068-2018-1286}, series = {WERP 1120}, pages = {46}, year = {2016}, abstract = {I propose a xed eects expectation-maximization (EM) estimator that can be applied to a class of nonlinear panel data models with unobserved heterogeneity, which is modeled as individual eects and/or time eects. Of particular interest is the case of interactive eects, i.e. when the unobserved heterogeneity is modeled as a factor analytical structure. The estimator is obtained through a computationally simple, iterative two-step procedure, where the two steps have closed form solutions. I show that estimator is consistent in large panels and derive the asymptotic distribution for the case of the probit with interactive eects. I develop analytical bias corrections to deal with the incidental parameter problem. Monte Carlo experiments demonstrate that the proposed estimator has good nite-sample properties.}, url = {http://ageconsearch.umn.edu/record/269326}, doi = {https://doi.org/10.22004/ag.econ.269326}, }