Stock sampling
Stock Sampling (Stock of Data)
Flow sampling is a way of sampling or collecting data when the relationship of interest deals with duration or survival analysis. In contrast to flow sampling, stock sampling refers to sampling people in a certain state at the time of the survey. Rather than focusing on transitions within a certain time interval, we only have observations at a certain point in time. This can lead to both left censoring and right censoring. Imposing the same model on data that have been generated under the two different sampling regimes can lead to research reaching fundamentally different conclusions if the joint distribution across the flow and stock samples differ sufficiently.
Stock sampling essentially leads to a sample selection problem. This selection issue is akin to the truncated regression model where we face selection on the basis of a binary response variable, but the problem has been referred to as length-biased sampling in this specific context. Consider, for example, the figure below that plots some duration data. If a researcher would revert to stock sampling and only sample and survey individuals at the survey dates (i.e. the survey data, 12 months after the survey date, etc.), there is a high likelihood the short duration spells will be omitted from the sample, as some durations shorter than 12 months are necessarily omitted from the sample:
A number of methods to adjust for these sampling issues have been proposed. One can appropriately adjust the Maximum Likelihood Estimators for censored flow data for the sample selection, or use nonparametric estimation methods for censored flow data for the sample selection, or use nonparametric estimation methods for censored data [6].
References
- Cameron A. C. and P. K. Trivedi (2005): Microeconometrics: Methods and Applications. Cambridge University Press, New York.
- Wooldridge, J. (2002): Econometric Analysis of Cross Section and Panel Data, MIT Press, Cambridge, Mass.
- Chesher, A. and T. Lancaster (1981): Stock and Flow Sampling. Economics Letters 8(1), pp. 63-65.
- Kiefer, N. M. (1988): Economic Duration Data and Hazard Functions. Journal of Economic Literature 26, pp. 646-679.
- Wooldridge, J. (2002): Econometric Analysis of Cross Section and Panel Data, MIT Press, Cambridge, Mass.
- Lewbel, A. and O. Linton (2002): Nonparametric censored and truncated regression. Econometrica, 70(2), pp. 765