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Re: st: two stage model variance estimators

From   "Rachel Bouvier" <>
To   <>
Subject   Re: st: two stage model variance estimators
Date   Fri, 16 Sep 2005 08:04:17 -0400

Hi Clive - The original project was to try and get a "trend" of GDP over
time, with the residuals as the fluctuations around that trend.  Then, I
would use both the trend and the flucuations as regressors in my second
stage model.  Again, this was a few years ago, and I am trying to dust
off the model and see if it makes sense to revisit it.  I know a lot
more now than I did then - I'm going to have to rethink the whole thing.
 I wish I had consulted Statalist then!

Thanks so much.

Rachel Bouvier
Assistant Professor of Economics
University of Southern Maine
11 Chamberlain Avenue
Portland, ME 04104
(207) 228-8377
>>> 09/16/05 3:58 AM >>>
Rachel Bouvier wrote:


> My first model is regressing the log of GDP on the year (ie, 1996) and
> the square of the year (ie, 3984016).  Originally, I ran this model
> separately for 30 countries.  I then obtained the predicted value of
> log of GDP for each of those countries (by using -predict-) and used
> in a second model.


Perhaps I've missed something, but I really _don't_ see the logic in
generating a quadratic term from a variable that merely records the
Why not use year dummies instead?

CLIVE NICHOLAS        |t: 0(044)7903 397793
Politics              |e:
Newcastle University  |

Whereever you go and whatever you do, just remember this. No matter how
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turning up to your funeral will be largely determined by local weather

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