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Re: st: ARIMA model in time-series panel data


From   Richard Herron <[email protected]>
To   [email protected]
Subject   Re: st: ARIMA model in time-series panel data
Date   Fri, 16 Mar 2012 15:08:49 -0400

Panels require strict exogeneity for consistency, so you can't have
lagged dependent variables on the right hand side (i.e., dynamic
panels aren't allowed).

If you think about the within estimator for panel data, then you have
y_{i, t-1} - mean(y_i) on the right hand side, which is not orthogonal
to e_{i,t} because mean(y_i) contains y_{i,t} from the left hand side.

There are some solutions to this in -xtabond-, which does the Arellano
and Bond estimator. Arellano and Bond correct the endogeneity by
estimating the dynamic panel in first differences and using lags as
instruments and GMM to take care of over-identification.

Chapter 9 in Cameron and Trivedi's "Microeconometrics Using Stata"
provides a handful of techniques for estimating dynamic panel models.
Chapters 21 and 22 in their Microeconometrics textbook provides more
theory. HTH.

On Fri, Mar 16, 2012 at 14:40, Nick Cox <[email protected]> wrote:
>
> You don't give the exact command you are using (-tsset- is just a
> precursor), but you are right. There is a limit to the number of
> panels that that command supports, and it is 1.
>
> What would a multiple panel ARIMA look like any way?
>
> Nick
>
> On Fri, Mar 16, 2012 at 5:04 PM, Rituparna Basu <[email protected]> wrote:
>
> > I am trying to run univariate ARIMA model in a time-series panel data but it is giving me the error msg 'sample may not include multiple panels'. I used the 'tsset' command to set the data as time-series panel.
> > I am not sure why the ARIMA model is not running. Is there a limit to the number of 'panels' or 'groups' while running the ARIMA model?  I am using STATA11.
>
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