The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Bias Correction

  • Jinyong Hahn
Reference work entry


Bias correction is a statistical technique used to remove the bias of an estimator. An unbiased estimator is such that its expectation is equal to the parameter of interest. Many introductory statistics textbooks discuss the desirability of having an unbiased estimator, although it is quickly pointed out that unbiasedness alone cannot be a good criterion for an estimator. This is usually illustrated by comparing two estimators with the use of a concrete loss function, where it is noted that an unbiased estimator with a large variance may be inferior to a biased estimator with a small variance.


Asymptotic theory Bias correction Empirical likelihood Generalized method of moments Limited information maximum likelihood Nuisance parameters Panel models Two-stage least squares 

JEL Classifications

C11 C13 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Jinyong Hahn
    • 1
  1. 1.