Dear Stata users,
Suppose you want to estimate the following LDP panel
model :
C_it = C_i(t-1) + P_it + X(1) + X(2) (1)
I think Xtabond2 can do this. But P_it is also an
endogenous variable and can be expressed as follow:
P_it = P_i(t-1) + C_i(t-1) + X(3)+ X(4) (2)
Where X(1)-X(4) exogenous
Three questions :
1) How to tell xtabond2 that P_it is endogenous ?
2) How to instrument for P_it using equation (2) ?
3) I really not catch the difference between gmm and
iv options in xtabond2 ?
Thank you for shedding some light on these questions.
Houcem Smaoui
PhD candidate
Laval University
Quebec City, Canada
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