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Re: st: re: xtivreg


From   W Zang <[email protected]>
To   [email protected]
Subject   Re: st: re: xtivreg
Date   Thu, 06 May 2010 10:12:48 +0100

Thanks a lot for all helpful responses.

Linda

Quoting Austin Nichols <[email protected]>:

W Zang :
As an example of Kit's point, consider:

clear all
u http://fmwww.bc.edu/ec-p/data/macro/abdata
tsset id year
xtivreg2 ys k (n=l2.n l3.n), fe endog(n)
qui ivreg2 ys k (n=l2.n l3.n)
ivendog n
qui xi:ivreg2 ys k (n=l2.n l3.n) i.id
ivendog n
testparm _I*

where the last line demonstrates the need for FE, and the endog test
does not support the use of the exclusion restriction--but that does
not necessarily mean that n is exogenous; with a better exclusion
restriction, the endog test could produce a different result.
Remember that the endog test
xtivreg2 ys k (n=l2.n l3.n), fe endog(n)
just compares
xtivreg2 ys k (n=l2.n l3.n), fe
to
xtivreg2 ys k n (=l2.n l3.n), fe
not to another specification with better instruments.


On Wed, May 5, 2010 at 10:07 AM, Christopher Baum <[email protected]> wrote:
<>
If the XT-IV model is properly specified, and fixed effects are necessary to ensure consistency, the pooled IV results are inconsistent, and any test based upon them is invalid.  You should be able to use the same syntax with endog(y2) on the ivreg2 command, but I am not surprised that the results differ. In the presence of unobserved heterogeneity, the pooled IV will be junk.

Kit

Kit Baum   |   Boston College Economics and DIW Berlin   |   http://ideas.repec.org/e/pba1.html An Introduction to Stata Programming   |   http://www.stata-press.com/books/isp.html An Introduction to Modern Econometrics Using Stata   |   http://www.stata-press.com/books/imeus.html

On May 5, 2010, at 9:37 AM, W Zang wrote:

Dear Kit

Thank you very much for your previous reply. I have another question and wonder if you could help me please. Before estimating the two simultaneous equations, I did the endogeneity test of y2.
xtivreg2 y1 (y2 = x4 x5) x1 x2 x3, fe endog (y2)

I also performed Durbin-Wu-Hausman test.
ivreg2 y1 (y2 = x4 x5) x1 x2 x3
ivendog (y2)

I got two different results. y2 is proved to be exogeneous in the first case and y2 is endogenous in the second case. Did I do something wrong? Which test should I follow?

Best Wishes,

Linda


Quoting Kit Baum <[email protected]>:

<>
Linda said

I am trying to use xtivreg to estimate two-stage least squares
simultaneous equations. I have two endogenous variables Y1 and Y2. Y1
and Y2 are affected by different exogenous variables. Y1 is affected
by X1, X2, X3 and Y2 is affected by X1, X4, X5.

Y1 = a0 + a1*Y2 + a2*X1 + a3*X2 + a4*X3
Y2 = b0 + b1*Y1 + b2*X1 + b3*X4 + b4*X5


xtivreg y1 (y2 = x4 x5) x1 x2 x3, fe
xtivreg y2 (y1 = x2 x3) x1 x4 x5, fe

The syntax is the same as it would be for a non-panel IV estimator. Just list the variables excluded from each equation within the parenthesized expression.

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