st: Population average in panel data

[Neil Hewitt <mcxnh4@nottingham.ac.uk>]

Hello everyone,

I am doing panel data analysis as part of the work I am involved. I have used the population average (pa) option in order to get robust standard errors. 

The panel data has been xtset i year

I have 81,000 i, 11 years

The data is population averaged using i.

As I understand it pa, averages across all the observation over the unit of aggregation (in this case i). As there is only one unit therefore this is surely the same as random effects, with the bonus of robust standard errors which isn't available with random effects?

I am of course assuming that the pa option keeps the longitudinal aspect of panel data and is not therefore averaging over 11 years? I have used pa for xtnbreg, xtpoisson and xtlogit.

If it is not and given the fact that I have put lags on my explanatory variables, how are these possible, and interpretable if averaging is not done with each time period?

Many thanks for your input, it is very much appreciated

Neil


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