st: Difference Model

[vikramfinavker <vikramfinavker@gmail.com>]

HI All,

I have a data like this...

year  firmid h1 x1 x2    x3 x4  x5
1998     1      0  1    10 
1999     1      0  1    11
2000     1      0  1    12
2001     1      0  1    12
2002     1      1  1    13
2003     1      1  1    18
2004     1      1  1    17
2005     1      1  1    16
2006     1      1  1    15
2007     1      1  1    14
1998     2      0  1    10 
1999     2      0  1    11
2000     2      0  1    12
2001     2      0  1    12
2002     2      0  1    13
2003     2      0  1    18
2004     2      1  1    17
2005     2      1  1    16
2006     2      1  1    15
2007     2      1  1    14

Now i want to run regression using following way;
reg x3 h1 x2

but i want to use only those observations where variables "h1" changes to
either "1" or "0". can i use first difference model.? Does it help me in
this case? can i run regression like:

reg x3 d.h1 x2 

or do i have to run it like this

reg d.x3 d.h1 d.x2

Please let me know if you can help.

Many Thanks.

Vikram


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