Reliable Panel Regression: A Default Workflow for Slow-Moving, Mismeasured Variables (opens in new tab)

Political scientists often interpret coefficient shrinkage under fixed effects as evidence that pooled associations are confounded. This paper shows why that inference is unreliable for slow-moving, mismeasured regressors. Fixed effects can remove much of the signal and identify coefficients from within-unit variation that is disproportionately measurement error, attenuating estimates toward zero. A lone fixed effects coefficient may therefore...