What Is Longitudinal Data?

Longitudinal data, sometimes called panel data, is da🍷ta that is collected through a series of repeated observations of the same subjects over some extended time frame—and is useful for measuring change.

Longitudinal data is collected through longitudinal studies and effectively follows the same sample over time, which differs fundamentally from cross-sectional data because it follows the same subjects over some time, while cross-sectional data samples different subjects (whether individuals, firms, countries, or regions) at each point in time. Meanwhile, a cross-sectional data set will always draw a new 澳洲幸运5官方开奖结果体彩网:random sample.

Longitudinal datไa is used widely in the s🙈ocial sciences, including among economists, political scientists, and sociologists.

Understanding Longitudinal Data

Often, analysts are iꩵnterested in how things change over time. In a typical cross-sectional sample, even if you measure some variable today and then again a year from now, you will probably be sampling different people each time. To get a better handle on how things change for the same people over time, you need to be able to track them and follow up with them a year from now, and in future waves. This is longitudinal data.

Longitudinal data is often used in economic and financial studies because it has several advantages over repeated cross-sectional data. For example, because longitudinal data measures how long events last, it can be used to see if the same group of individuals remain unemployed during a 澳洲幸运5官方开奖结果体彩网:recession, or whether different individuals are moving in and out of 澳洲幸运5官方开奖结果体彩网:unemployment. This can help determine the factors that most affect unemployment.

Example of a Longitudinal Study

In a longitudinal study, researchers repeatedly examine the same individuals to detect any changes that might occur over a period of time. The benefit of a longitudinal study is that researchers are able to detect developments or changes in the characteristics of the target popul♍ation at both the group and the individual level.

An example of a longitudinal study would be a study conducted to understand the similarities or differences between identical twins who are brought up together vs. identical twins who are not. The study observes several variables, but the constant is that all the participants have identical twins.

Applications of Longitudinal Data

Longitudinal analysis can also be used to calculate a portfolio’s 澳洲幸运5官方开奖结果体彩网:value at risk (VaR), using the historic simulation method. This simulates how the value of the current 澳洲幸运5官方开奖结果体彩网:portfolio would have fluctuated over previous time periods, using the observed historical fluctua꧒tions of the assets in the portfolio during those times. It provides an estimate of the maximum likely loss over the next time period.

Longitudinal data is also used in 澳洲幸运5官方开奖结果体彩网:event studies to analyze what factors drive abnormal stock returns over time, or how stock prices react to merger and earnings announcements. It can also be used to measure poverty and income inequality by tracking individual households. And because standardized test scores in schools are longitudinal, they can be used to assess teacher effectiveness and otheﷺr factors affecting student performance.

Social scientists also use longitudinal data to try to understand causation of events that may have occurred in the 🐎past and how they lead to outcomes observed in later waves of the data—for instance, the effect of the passage of a new law on crime statistics, or a𒊎 natural disaster on births and deaths years later.

The Bottom Line

Longitudinal data is data that is collected sequentially through repeated observations of the same subjects over time. It is useful for measuring change and is used in finance to track company profitability, risk, and to understand✃ the effect of economic shocks.