Combining Micro and Macro Data in Microeconometric Models

Abstract

Census reports can be interpreted as providing nearly exact knowledge of moments of the marginal distribution of economic variables. This information can be combined with cross-sectional or panel samples to improve accuracy of estimation. In this paper we show how to do this efficiently. We show that the gains from use of marginal information can be substantial. We also discuss how to test the compatibility of sample and marginal information.