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st: RE: constant variable as IV in panel?


From   Gordon Hughes <G.A.Hughes@ed.ac.uk>
To   statalist@hsphsun2.harvard.edu
Subject   st: RE: constant variable as IV in panel?
Date   Fri, 24 Jun 2011 12:05:37 +0100

Since you didn't really get an answer to your final post:

A. It is hard to believe that a climate variable is the only possible instrument for national identity. Why not take a look at some of the World Governance Index (WGI) or other cross-country variables published by the World Bank - these vary over time.

B. Even if this is the only possible instrument, you seem to be forgetting that -xtivreg- and other programs such as -ivreg2- automatically include all exogenous variables as instruments. The steps that you describe - matching the climate variable with all observations for each country and then using xtivreg - should work. I have no idea whether the results will be satisfactory.

Gordon Hughes
g.a.hughes@ed.ac.uk

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