# Re: st: Decomposition of outcome differentials by module JMPIERCE2

 From Ben Jann To statalist@hsphsun2.harvard.edu Subject Re: st: Decomposition of outcome differentials by module JMPIERCE2 Date Mon, 20 Jul 2009 12:35:42 +0200

```Let y(G) denote the mean outcome for group G. The decomposition of the
difference in differences

D = [y(isr_nat) - y(isr_imm)] - [y(ger_nat) - y(ger_imm)]

is then computed as

. jmpierce2 ger_nat ger_imm isr_nat isr_imm

Germany is the benchmark. If you want Israel be the benchmark, type

. jmpierce2 ger_nat ger_imm isr_nat isr_imm, benchmark(2)

The choice of the benchmark does not change the overall differential.
However, it changes how the differential is decomposed. See the
formulas in -help jmpierce2-.

ben

On Mon, Jul 20, 2009 at 10:59 AM, Michael
Buryak<michael.buryak@gmail.com> wrote:
> Hello, Statalist
>
> Something not clear for me in the results after using the module JMPIERCE2.
>
> For example:
> I have the estimated wage for four groups : two in Israel and two in Germany.
> In each country one group is natives and second group is immigrants.
> So four groups:
> 1) ISR_NAT
> 2) ISR_IMM
> 3) GER_NAT
> 4) GER_IMM
>
> If I want to decompose difference in difference:
>
> D = [(D ISR_NAT - D ISR_IMM) - (D GER_NAT - D GER_IMM)]
>
> Is it my command right:
>
> reg wage hour age educ if isr_nat==1
> est store isr_nat
> reg wage hour age educ if isr_imm==1
> est store isr_imm
> reg wage hour age educ if ger_nat==1
> est store ger_nat
> reg wage hour age educ if ger_imm==1
> est store ger_imm
> jmpierce2 isr_nat isr_imm ger_nat ger_imm, benchmark(1)
>
> Which order of estimators in command jmpierce2 is right for my decomposition?
> If I change to the parameter benchmark(2), the total difference is same. Why?
>
> What is the role of parameters "benchmark" and "reference" in my order
> of estimators:  isr_nat isr_imm ger_nat ger_imm?
>
> Michael
>
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```