Regression with Panel Data

(SW Chapter 10)

summary statistics

sum year

sum state

create year dummies

gen y82=(year==1982)

gen y83=(year==1983) gen y84=(year==1984) gen y85=(year==1985) gen y86=(year==1986) gen y87=(year==1987) gen y88=(year==1988)

minimum legal drinking age

gen da18=(mlda<19) gen da19=(mlda>=19)*(mlda<20) gen da20=(mlda>=20)*(mlda<21) gen da21=(mlda>=21)

fatality rate per 10,000 in the population

gen vfrall=10000*mrall

gen incperc=perinc/1000 gen lincperc = ln(incperc) gen vmilespd = vmiles/1000 gen frmall = mrall/(vmiles/100000) gen jailcom = ((jaild+comserd)>0) gen mjailcom = (jaild==.)*(comserd==.)

mvdecode-Change numeric values to missing values

mvdecode mjailcom,mv(1)

replace jailcom = jailcom + mjailcom;

reg vfrall beertax if (year==1982), r

display

display "Adjusted Rsquared = " _result(8)

reg vfrall beertax if (year==1988), r dis "Adjusted Rsquared = " _result(8)

preserve gen dvfrall = vfrall-vfrall[_n-6] gen dbtax = beertax-beertax[_n-6]

keep

reg dvfrall dbtax, r dis "Adjusted Rsquared = " _result(8) restore

egen-Extensions to generate

by state, sort : egen float beertaxtest = total(beertax*(year==1982))

browse state year beertax beertax1982

egen beertax1988 = sum(beertax*(year==1988)) ,by(state)

egen vfrall1982 = sum(vfrall*(year==1982)) ,by(state)

egen vfrall1988 = sum(vfrall*(year==1988)) ,by(state)

gen beertax_diff=beertax1988-beertax1982

gen vfrall_diff=vfrall1988-vfrall1982

areg-Linear regression with a large dummy-variable set

areg vfrall beertax, absorb(state) r

areg vfrall beertax y82 y83 y84 y85 y86 y87, absorb(state) r

reg vfrall beertax, r dis "Adjusted Rsquared = " _result(8)

areg vfrall beertax, absorb(state) r

areg vfrall beertax y82 y83 y84 y85 y86 y87, absorb(state) r

test y82 y83 y84 y85 y86 y87

areg vfrall beertax da18 da19 da20 jaild comserd vmilespd unrate lincperc y82 y83 y84 y85 y86 y87, absorb(state) r

test y82 y83 y84 y85 y86 y87 test da18 da19 da20

test jaild comserd test unrate lincperc

areg vfrall beertax da18 da19 da20 jaild comserd vmilespd y82 y83 y84 y85 y86 y87, absorb(state) r

test y82 y83 y84 y85 y86 y87 test da18 da19 da20 test jaild comserd

areg vfrall beertax mlda jailcom vmilespd unrate lincperc y82 y83 y84 y85 y86 y87, absorb(state) r

test y82 y83 y84 y85 y86 y87 test unrate lincperc

areg vfrall beertax da18 da19 da20 jaild comserd vmilespd unrate lincperc y82 y83 y84 y85 y86 y87, absorb(state) r cluster(state)

test y82 y83 y84 y85 y86 y87 test da18 da19 da20

test jaild comserd test unrate lincperc

Example: Traffic deaths and beer taxes in STATA