Panel data allow an analysis of how individuals and households experience change in their socio-economic environment and how they respond to those changes, research which is not possible with cross-sectional data. In particular the panel provides data which:
- Allows the analysis of the incidence of conditions and events such as poverty or unemployment over time.
- Allows the analysis of how conditions, life events, behaviour and values are linked with each other dynamically over time.
- Enables researchers to control for unobserved heterogeneity in cross-sectional models through difference analysis.
- Enables analysis of the effects of the interaction of changes at the individual level for the whole household, or for other individuals.
- Provides unique information on the processes of household formation and dissolution and geographic mobility.