This paper surveys recent methods of panel data analysis, and provides some applications to the real world data.
The main points in this paper are as follows ; (1) researchers should choose the best available methodology, given the nature of the panel data at hand, (2) researchers should employ proper diagnostic tests to select the most robust model, (3) researchers should strive to extract as much information as possible, even from the incomplete panel data, (4) researchers should use the panel data to examine validity of microeconomic theory and feed back information to the theory and (5) researchers are now able to analyze policy issues in ways consistent with microeconomic theory by mean of panel data.
