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Re: st: Windmeijer's corrected se in xtivreg2 gmm2s


From   Christopher Baum <[email protected]>
To   "[email protected]" <[email protected]>
Subject   Re: st: Windmeijer's corrected se in xtivreg2 gmm2s
Date   Mon, 27 Jun 2011 10:16:21 -0400

<>
On Jun 27, 2011, at 2:33 AM, Humairat wrote:

> Thank you Kit for your useful input. The model I am estimating using xtivreg2 gmm2s cluster(id) is a static model and not dynamic. In the subsample N is 45, average T is 4.1 and the total number of observations are 185.



If it is a static model, you don't need DPD methods, and the Windmeijer correction is irrelevant. It pertains to the second-stage VCE of DPD estimates, not to GMM estimates of a static model. The cluster-robust VCE should be consistent, and with 45 firms you have a reasonable number of clusters per the Angrist-Pischke-Adams rule of thumb of 42.

Kit Baum   |   Boston College Economics & 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




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