Cross-Sectional vs Longitudinal


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Posted by Bob on December 12, 1999 at 08:23:03:

There are two basic types of econometric studies depending on the phenomenon to be explained: cross-sectional and longitudinal (time-series). Typically, a financial study might be made of a number of companies or their common stocks and their earnings and other annual financial data and market data for a number of consecutive months or years. A cross-sectional study would include multiple companies or stocks for any one time period, such as 1999, to account for variation in some factor of interest across all the companies at that time. In contrast, a longitudinal or time-series study would include multiple time periods for any one company, such as Yahoo, Inc., to account for changes in some factor of interest over all the time periods for that company. A combination cross-sectional and longitudinal study can be made to address both dimensions of change, space and time. For example, a panel study would include all of the data items for the same identical companies for the same identical number of time periods, such as all the companies in the S&P 500 Index at the end of 1999 for the months or years from January 1990 through December 1999.




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