In this article, we will follow Woolridge (2002) procedure to estimate a set of equations with nonlinear functional forms for panel data using the two-stage least squares estimator. It has to be mentioned that this topic is quite uncommon and not used a lot in applied econometrics, this is due that instrumenting the nonlinear terms […]
In this article, we will follow Drukker (2003) procedure to derive the first-order serial correlation test proposed by Jeff Wooldridge (2002) for panel data. It has to be mentioned that this test is considered a robust test, since works with lesser assumptions on the behavior of the heterogeneous individual effects. We start with the linear
Wooldridge Serial Correlation Test for Panel Data using Stata. Read More »
Watch a part of the live DSGE training organized by M&S Research Hub, for more information and videos visit https://ms-researchhub.com/home/training/gem-training.html
Modeling COVID 19 Using Dynamic Equations Read More »
While we’re using the time series datasets, often we’re highly likely to find serial correlation and heteroskedasticity in our data. These cases increase the chances to obtain serially correlated errors with non-constant variance. If we’re purely interested in statistical inferences, we should go for the HAC robust standard errors under the Time Series context. This
HAC robust standard errors. Read More »
The lessons from behavioral economics have ameliorated social wellbeing and economic success in recent years. Academics and policymakers now recognize that integrating how individuals behave and make decisions in real-life dramatically improves the effectiveness of public policies and the validity of simple theoretical models. Thus, this area of research has enhanced our understanding of the
The Rise of Behavioral Econometrics.. Read More »
When we start to analyze any type of economic relationship, it is often said that we always need to graph the data. The importance of this step is having a visual where we can increase the understanding of our current relationships in the data. Sometimes with this, we can improve the mathematical functional form in
Identifying Patterns with Stata Graphs Read More »
While modelling specific phenomenon’s in economics, sometimes we might encounter a functional form which may not be linear in the explanatory variables. Assuming, that we still have linearity in the estimators, we have the capability to include in the regression, variables with powers. As an example, consider the following model: The last equation presents the
Investigating Non-linear relationships with curvefit using Stata Read More »
Log-linearisation in Short with an example
Log-linearisation in Short Read More »
