Panel data models have become increasingly popular among applied researchersdue to their heightened capacity for capturing the complexity ofhuman behavior as compared to cross-sectional or time-series data models.As a consequence, more and richer panel data sets also have becomeincreasingly available. This second edition is a substantial revision of thehighly successful first edition of 1986. Recent advances in panel data researchare presented in a rigorous and accessible manner and are carefullyintegrated with the older material. The thorough discussion of theory andthe judicious use of empirical examples will make this book useful to graduatestudents and advanced researchers in economics, business, sociology,political science, etc. Other specific revisions include the introduction ofBayes method and the notion of strict exogeneity with estimators presentedin a generalized method of moments framework to link the identificationof various models, intuitive explanations of semiparametric methods of

estimating discrete choice models and methods of pairwise trimming forthe estimation of panel sample selection models, etc.

Cheng Hsiao is Professor of Economics at the University of SouthernCalifornia. His first edition of Analysis of Panel Data (EconometricSociety Monograph 11, Cambridge University Press, 1986) has beenthe standard introduction for students to the subject in the economicsliterature. Professor Hsiao is also a coauthor of Econometric Models,Techniques, and Applications, Second Edition (Prentice Hall, 1996, withM. Intriligator and R. Bodkin), coeditor of Analysis of Panels and LimitedDependent Variable Models (Cambridge University Press, 1999, withK. Lahiri, L.F. Lee, and M.H. Pesaran), and coeditor of Nonlinear StatisticalInference (Cambridge University Press, 2001, with K. Morimuneand J.L. Powell). He is a Fellow of the Econometric Society and coeditorand Fellow of the Journal of Econometrics.