# st: Re: RE: questions about stationarity test results using IPSHIN

 From Jeannette Wicks-Lim To statalist@hsphsun2.harvard.edu Subject st: Re: RE: questions about stationarity test results using IPSHIN Date Thu, 18 Nov 2004 17:45:35 -0500

Hi,
Maybe I'm misunderstanding the results ( I am a real novice re: time series issues). I thought that the t-bar being further from zero for lngap indicates that it is stationary (more negative then the cv1). Is that incorrect?
Thanks!
J
----- Original Message ----- From: "Nick Cox" <n.j.cox@durham.ac.uk>
To: <statalist@hsphsun2.harvard.edu>
Sent: Thursday, November 18, 2004 5:35 PM
Subject: st: RE: questions about stationarity test results using IPSHIN

```Your commentary seems at odds with your results
in that t-bar is further from zero for -lngap-
than for the other variables.

Nick
n.j.cox@durham.ac.uk

Jeannette Wicks-Lim

```
```I've conducted the IPSHIN test on two variables, one of which
appears to be
nonstationary (log of the minimum wage, or "lnmin1") and the
other appears
to be stationary (log of the 5th wage percentile, or "lnq5").
When I create
a third variable (log of 5th wage percentile - log of minimum wage,
or"lngap"), the IPSHIN test indicates that it is stationary.
How can it be
that the ratio of a stationary and nonstationary variable is
stationary?
(Some background info: the panels in this dataset are US
states -- all 50,
the time points are 6 month intervals over 20 years).

Here are my results:

. ipshin lnmin1 if gestcen~=53, lags(17) trend

Im-Pesaran-Shin test for cross-sectionally demeaned lnmin1
Deterministics chosen: constant & trend

t-bar test, N,T = (50,40)         Obs = 1593
Augmented by 17 lags (average)

t-bar     cv10      cv5       cv1   W[t-bar]    P-value
-1.456   -2.320    -2.360    -2.440        .         .

. ipshin lnq5 if gestcen~=53, lags(17) trend

Im-Pesaran-Shin test for cross-sectionally demeaned lnq5
Deterministics chosen: constant & trend

t-bar test, N,T = (50,40)         Obs = 1593
Augmented by 17 lags (average)

t-bar     cv10      cv5       cv1   W[t-bar]    P-value
-3.087   -2.320    -2.360    -2.440        .         .

. ipshin lngap if gestcen~=53, lags(17) trend

Im-Pesaran-Shin test for cross-sectionally demeaned lngap
Deterministics chosen: constant & trend

t-bar test, N,T = (50,40)         Obs = 1593
Augmented by 17 lags (average)

t-bar     cv10      cv5       cv1   W[t-bar]    P-value
-3.585   -2.320    -2.360    -2.440        .         .

```
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