Hi Hanna,
If you are substantively interested in the trend than there is an intermediate approach. You could
use dummies for each year and no constant, so that each dummie parameter represents the constant
in that year, save those parameters in a new file and estimate a smooth curve through them.
Ideally you would save the standard errors, and use the inverse squared standard errors as weights
in the smooth. You can put error bands around that curve or around the first derivative (is there
a trend?) or second derivative (is there a change in trend?). Now I haven't found out how to do
that in Stata (especially the weights and the derivatives), so I did that in R. I have a paper
called "Deceleration of the Trend in Inequality of Educational Opportunity in the Netherlands"
doing that on my website: http://home.fsw.vu.nl/m.buis/. If you are interested than I am more than
willing to share my R-code with you.
HTH,
Maarten
--- Clive Nicholas <[email protected]> wrote:
> Cornelia 'Hanna' Schmidt wrote:
>
> > I know it is a basic question, but it would be great if you could help me.
> > I have a panel dataset for a sample of 50 countries over a period of 40
> > years.
> >
> > How can I test if there is a time trend in the data and how can I correct
> > for it?
>
> This has come up before on the list. The easiest answer is to lay out two
> alternatives:
>
> (1) use a time counter, either starting from 1 or from the first year in
> your dataset;
>
> (2) use dummy variables for each year.
>
> Both have their pros and cons: (1) is more parsimonious, but it doesn't
> adequately capture the peaks and troughs of your data; (2) is the exact
> opposite.
-----------------------------------------
**between 1/2/2006 and 31/3/2006 I will be**
**visiting the UCLA, during this time the**
**best way to reach me is by email**
Maarten L. Buis
Department of Social Research Methodology
Vrije Universiteit Amsterdam
Boelelaan 1081
1081 HV Amsterdam
The Netherlands
visiting adress:
Buitenveldertselaan 3 (Metropolitan), room Z214
+31 20 5986715
http://home.fsw.vu.nl/m.buis/
-----------------------------------------
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