Cross-section analysis

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Updated: Aug 20, 2021

Statistical analysis conducted by taking data from a set of units at a particular point in time and examining the variations in the data across the units. This is in contrast to time series anlysis. For example, we may be interested in the relationship between the size of business firms and their profitability. We could then collect data on the size of individual firms in terms of the number of workers they employ, their sales revenue, net assets ør whatever size measure is readily available at some given period of time. We would also collect data on their profitability over the same period. We would then seek to detennine whether firms which differed in size also tended to differ significantly in profitability, and if so in which direction the relationship went. This would then be a cross-section analysis.

Reference: The Penguin Dictionary of Economics, 3rd edt.



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