[1] When dealing with duration data (such as employment spells or mortality outcomes), the data sampling method has a direct impact on subsequent analyses and inference.
An example in demography would be sampling the number of people who die within a given time frame (e.g. a specific calendar year); a popular example in economics would be the number of people leaving unemployment within a given time frame (e.g. a specific quarter).
Salant shows that heterogeneity in hazard rates between the stock and the flow distribution provides a key to understanding why these two statistics differ.
For instance, if the probability of getting a job offer goes down with time unemployed, E[T] < E[S], where S and T stand for observed and actual duration respectively.
[2] Renewal theory is the appropriate tool for handling these issues,[1] and a wide range of estimators have been proposed.