Re: st: RE: constant variable as IV in panel?

[Matthias Opfinger <opfinger@vwl.uni-hannover.de>]

Of course, you're right. I confused some things here. The climatic 
variable was a useful instrument for some other project I was working on 
where ethnic polarization had to be instrumented. I'm sorry for that 
confusion.
But still my question remains. What do I do if I have a panel but only 
one observation for the possible instrument, e.g. from the past and it 
doesn't up to today. Is it somehow still possible to use panel iv methods?

Matthias

Am 23.06.2011 14:37, schrieb Austin Nichols:
> Matthias Opfinger<opfinger@vwl.uni-hannover.de>:
> What does "national identity" mean here?  What is the outcome variable?
> I find it hard to believe the exclusion restriction for any
> climate-based measure, in most cases
> [but see e.g. http://www.nber.org/papers/w14031 for a good example
> from economics].
> It is in the nature of climate to affect everything directly,
> including the outcome, even if only in a small way.
>
> On Thu, Jun 23, 2011 at 5:52 AM, Matthias Opfinger
> <opfinger@vwl.uni-hannover.de>  wrote:
> > Thanks for the remark. Actually I try to instrument national identity. The
> > instrument I want to use is the percentage of the land mass in temperate
> > climatic zones. In a cross section that worked quite well, but I'm not sure
> > how to use this in a panel setting.
> >
> > Am 23.06.2011 11:36, schrieb Nick Cox:
> > > There are many instrumental variable experts on the list who are better
> > > placed than I to comment on that side.
> > >
> > > I just want to point out that the implicit climatology here is fallacious,
> > > not that it needs a geographer who has occasionally published on climate to
> > > point it out. Whatever scheme of climatic zones is being considered here,
> > > and there are many standards to choose from,
> > >
> > > 1. it won't be true for most if not all large countries that they fall in
> > > just one climatic zone (think Russia, China, Brasil, USA, etc.)
> > >
> > > 2. it won't even be true for many smaller countries
> > >
> > > 3. the assumption that the climate is unchanging is also incorrect,
> > > although probably less important than 1 or 2 for this study.
> > >
> > > More positively, climatic zonation throws away information that is encoded
> > > in variables like precipitation, temperature, etc. but using the latter will
> > > underline the heterogeneity problem identified in 1 and 2.
> > >
> > > Nick
> > > n.j.cox@durham.ac.uk
> > >
> > > Matthias Opfinger
> > >
> > > I want to estimate a panel model with observations on approx. 90
> > > countries for five points in time between 1980 and 2005. However, one of
> > > my explanatory variables is endogeneous. The only possible instrument is
> > > a variable on climatic zones. So it would be the same for each country
> > > over all points in time. How can I put this into my model? Do I just put
> > > the same value for each country over all the points in time and then use
> > > xtivreg?
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--
Dipl.-Ök. Matthias Opfinger	

Leibniz Universität Hannover	
Institut für Makroökonomik
Department of Economics

Koenigsworther Platz 1
30167 Hannover
Germany

Phone: +49-(0)511-762-5655
http://kaldor.vwl.uni-hannover.de/

*
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