The Issue of Endogeneity and Possible Solutions in Panel Data Analysis in The Hospitality Literature

This study discusses endogeneity and causality issues in analyzing panel data and presents possible suggestions to alleviate them. Establishing causality is of paramount interest for researchers, yet the hospitality literature has tended to employ econometric techniques that rely heavily on modeling assumptions for endogeneity problems. Accordingly, this article provides practical guidance for hospitality researchers in addressing endogeneity issues when analyzing panel data. Specifically, this article (a) discusses endogeneity issues in the use of panel data, (b) suggests possible remedies to mitigate endogeneity problems, (c) reviews how the existing hospitality literature has previously dealt with such problems, and (d) suggests how hospitality researchers can effectively address endogeneity issues with reference to an example of difference-in-differences methods using restaurant panel data.