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Re: st: RE: constant variable as IV in panel?


From   Austin Nichols <austinnichols@gmail.com>
To   statalist@hsphsun2.harvard.edu
Subject   Re: st: RE: constant variable as IV in panel?
Date   Thu, 23 Jun 2011 08:37:17 -0400

Matthias Opfinger <opfinger@vwl.uni-hannover.de>:
What does "national identity" mean here?  What is the outcome variable?
I find it hard to believe the exclusion restriction for any
climate-based measure, in most cases
[but see e.g. http://www.nber.org/papers/w14031 for a good example
from economics].
It is in the nature of climate to affect everything directly,
including the outcome, even if only in a small way.

On Thu, Jun 23, 2011 at 5:52 AM, Matthias Opfinger
<opfinger@vwl.uni-hannover.de> wrote:
> Thanks for the remark. Actually I try to instrument national identity. The
> instrument I want to use is the percentage of the land mass in temperate
> climatic zones. In a cross section that worked quite well, but I'm not sure
> how to use this in a panel setting.
>
> Am 23.06.2011 11:36, schrieb Nick Cox:
>>
>> There are many instrumental variable experts on the list who are better
>> placed than I to comment on that side.
>>
>> I just want to point out that the implicit climatology here is fallacious,
>> not that it needs a geographer who has occasionally published on climate to
>> point it out. Whatever scheme of climatic zones is being considered here,
>> and there are many standards to choose from,
>>
>> 1. it won't be true for most if not all large countries that they fall in
>> just one climatic zone (think Russia, China, Brasil, USA, etc.)
>>
>> 2. it won't even be true for many smaller countries
>>
>> 3. the assumption that the climate is unchanging is also incorrect,
>> although probably less important than 1 or 2 for this study.
>>
>> More positively, climatic zonation throws away information that is encoded
>> in variables like precipitation, temperature, etc. but using the latter will
>> underline the heterogeneity problem identified in 1 and 2.
>>
>> Nick
>> n.j.cox@durham.ac.uk
>>
>> Matthias Opfinger
>>
>> I want to estimate a panel model with observations on approx. 90
>> countries for five points in time between 1980 and 2005. However, one of
>> my explanatory variables is endogeneous. The only possible instrument is
>> a variable on climatic zones. So it would be the same for each country
>> over all points in time. How can I put this into my model? Do I just put
>> the same value for each country over all the points in time and then use
>> xtivreg?
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