David,
Thanks for this. I'll take a look at that book.
C.
David Greenberg wrote:
> The issue is discussed in Ronald Kessler and David Greenberg, LINEAR PANEL
> ANALYSIS: MODELS OF QUANTITATIVE CHANGE (Academic Press, 1981). In a
> nutshell, the two models are equivalent. Take the equation Y_t = a +
> b_1*Y_{t-1}+b_2*X_t + e_t. Subtract Y_{t-1} from both sides, which changes
> nothing. Now the dependent variable is a change score. The only difference
> is that the coefficient of Y_{t-1} is now b_1 - 1 instead of b_1. For
> certain types of analyis one version is more convenient than the other,
> but algebraicly they are interchangeable. David Greenberg, Sociology
> Department, New York University
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