Essay
Suppose that in an effort to explain variation in wages,you collect a panel data set with 12,300 total observations over 3 different years with the independent variables as experience,education,married (dummy variable is 1 if married and 0 if not married)and male (dummy variable is 1 if male and 0 if female).
a)How do you estimate a first-differenced model for these data? Explain in as much detail as possible.
b)What are the advantages of estimating a first-differenced model?
c)What are the drawbacks of estimating a first differenced model for this scenario?
Correct Answer:
Verified
a)The first differenced mode for these d...View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Correct Answer:
Verified
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Q20: Fixed-effects models are more appropriate than random-effects
Q21: Fixed-effects models are preferable to pooled cross-section
Q22: The fact that panel data varies across
Q23: What does the error term look like
Q24: Random-effects models improve on pooled cross-section models
Q26: What is a random-effects model? How do
Q27: Suppose that in an effort to explain
Q28: Random-effects models are more appropriate than fixed-effects
Q29: What is a fixed-effects model? How do
Q30: Using the National Longitudinal Survey of young