Difference Between Time Series and Panel Data

The key difference between time series and panel data is that time series focuses on a single individual at multiple time intervals while panel data (or longitudinal data) focuses on multiple individuals at multiple time intervals. Consider the following two examples to understand the difference between time series and panel data clearly: profit of an individual over a period of ten years is an example of time series data while profit of set of individuals over a period of ten years is an example for panel data.

Fields such as Econometrics and statistics relies on data. Moreover, it is a significant aspect of research and analysis. Usually, there are various methods to obtain data. Government and private organizations, internet, and international organizations such as IMF and World Bank use several methods to gather data. Further, there are various types of data. This article discusses two of them which are the time series and panel data.

CONTENTS

1. Overview and Key Difference
2. What is Time Series 
3. What is Panel Data
4. Side by Side Comparison – Time Series vs Panel Data in Tabular Form
5. Summary

What is Time Series?

Time series data focuses on observations of a single individual at different times usually at uniform intervals. One example is the income of an organization calculated at the end of each year for a period of 5 years’ time.

The time series data has the form of Xt. The t subscript denotes the time. Stock prices, Gross Domestic Product and automobile sales figures data can take time series form.

What is Panel Data?

Panel data is also called longitudinal data. This type of data focuses on multiple individuals at multiple time periods. The panel data has the form of Xit. The i denotes the individual while t denotes the time period. One example is the Gross Domestic Product (GDP) of five countries over a period of ten years such as 2001 to 2010. In this scenario, there is a total of 50 observations.

Another example is the income of a set of individuals as follows.

What is the Difference Between Time Series and Panel Data?

Time series data is a dataset consist of observations of one individual at multiple time intervals. Panel data is a dataset consist of observations of multiple individuals obtained at multiple time intervals. Time series data focuses on single individual while panel data focus on multiple individuals. Looking at the application of both types of data, profit of an individual over a period of ten years is an example of time series data while profit of set of individuals over a period of ten years is an example for panel data.

Summary – Time Series vs Panel Data

The difference between time series and panel data is that time series focus on a single individual at multiple time intervals while panel data focus on multiple individuals at multiple time intervals.

Reference:

1.MatthewRafferty. “Structure of Data: Cross-Sectional, Time-Series, and Panel Data.” Structure of Data: Cross-Sectional, Time-Series, and Panel Data, Matthew Rafferty, 13 Jan. 2013. Available here

2.“Panel Data.” Wikipedia, Wikimedia Foundation, 28 May 2018. Available here 

Image Courtesy:

1.’ASSET econometrics-DC37’By Mathijsjansen86 – Own work, (Public Domain) via Commons Wikimedia