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RE: st: option endog in "xtivreg2,... fe"


From   "Schaffer, Mark E" <[email protected]>
To   <[email protected]>
Subject   RE: st: option endog in "xtivreg2,... fe"
Date   Wed, 14 Sep 2011 18:41:16 +0100

Bruno,

It is indeed a verson of the DWH test, as Cam suggests.  It's not a test
of strict exogeneity, only contemporaneous exogeneity, with the caveat
that the test is being applied to within-transformed variables.

One way to think about it is that it's a test in a GLS environment.  The
FE estimator is a GLS estimator

http://www.stata.com/statalist/archive/2011-04/msg00566.html

and after applying the GLS transformation (the within transformation) to
the data, the endog option tests for endogeneity in the usual
DWH/GMM/etc. way.

Adding a test of the FE strict exogeneity assumptions to xtivreg2 and/or
xtoverid is on my to-do list, but my to-do list is waaaaay too long....

HTH,
Mark

> -----Original Message-----
> From: [email protected] 
> [mailto:[email protected]] On Behalf Of 
> Cameron McIntosh
> Sent: 14 September 2011 18:02
> To: STATA LIST
> Subject: RE: st: option endog in "xtivreg2,... fe"
> 
> Hi Bruno,
> 
> I think it's your first guess... take a look at these 
> archived responses, they might be useful:
> 
> http://www.stata.com/statalist/archive/2006-05/msg01071.html
> 
> http://www.stata.com/statalist/archive/2009-08/msg01349.html
> 
> I think it's essentially the same as the DWH test:
> Davidson, R., & MacKinnon, J.G. (1993). Estimation and 
> Inference in Econometrics. New York, NY: Oxford University Press.
> Baum, C.F., Schaffer, M.E., & Stillman, S. (2002). IVENDOG: 
> Stata module to calculate Durbin-Wu-Hausman endogeneity test 
> after ivreg.Statistical Software Components S494401, Boston 
> College Department of Economics (revised 29 May 
> 2007).http://ideas.repec.org/c/boc/bocode/s429401.html
> Cam
> 
> > Date: Wed, 14 Sep 2011 17:22:29 +0100
> > Subject: st: option endog in "xtivreg2,... fe"
> > From: [email protected]
> > To: [email protected]
> > 
> > Dear statalisters,
> > 
> > I have a question on the endog option in "xtivreg2 ..., fe". Is it
> > testing strict exogeneity (as needed for consistency in a FE model),
> > or only discarding contemporary endogeneity?
> > 
> > Thanks for your help,
> > Bruno Rocha
> > *
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