To Pool or Not to Pool: Homogeneous Versus Heterogeneous Estimators Applied to Cigarette Demand

Abstract
This paper reexamines the benefits of pooling and, in addition, contrasts the performance of newly proposed heterogeneous estimators. The analysis utilizes a panel data set from 46 American states over the period 1963 to 1992 and a dynamic demand specification for cigarettes. Also, the forecast performance of the various estimators is compared. © 2000 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology