st: Country and population weights in panel analysis

[ARDE DE <wsbbarde@gmail.com>]

Dear All:

We are running a panel analysis using aggregate data (like income,
unemployment etc.) for 24 counties (regions) in some country. We have
eight years of data. The counties differ substantially in size
(population: from 500.000 to 20 million) such that the averages that
we use in theory are not equally reliable, a fact that our model
should reflect.
We have two questions:

1) I know that in stata we can specify weights for panel regressions.
But do you know about any references that may guide us to the correct
modelling of population weights and give some more theoretical
background? I was searching the panel books of Wooldridge (2010) and
Matyas (2008). They are dealing with stratification issues which
appears to be much more complicated than what I was looking for.

2) A fact that confuses me: Why do most authors not consider country
weights in well-known cross country studies in the literature? Just
because they tested for heteroskedasticity and found none? I searched
a large economics journal database for cross country panel
regressions, but the question of population weights seems not to be an
issue. I am confused because I was thinking it is an important element
of the model (even if empirically there seems to be homosked.)

Any help/hints will be highly appreciated

Arde
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