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st: RE: What does id() mean?

From   "jyotsna puri" <[email protected]>
To   [email protected]
Subject   st: RE: What does id() mean?
Date   Mon, 24 Jan 2005 18:31:03 +0000

Dear Listers,

I am using a panel dataset, where my unit of observation is a village. The dataset
spans 10 years, with data collected every two years. I have an unbalanced
dataset with the maximum no. of time periods being 6, and minimum being 1.
I am examining land devoted to agriculture and have - a la Woolridge - many
'corner solutions' i.e. many zeros.

I use xttobit on the data, after setting id variable as i(village). Quadchk tells
me that my specifications are unstable. Indeed my rho (percentage of variance
explained by intra-panel variance) is quite high, varying from 0.6 to 0.75.

While thinking about this problem, I realize that the data is probably collected
in two stages - to wit, the district is selected first and then the village. Thus, I am
led to believe that my observations are not independent within a district but
are independent across districts.

In response, instead of setting the id variable
as i(village) I set it as i(district).
Is my thinking erroneous?

I am also unclear about how STATA's estimation is changing. I realize that in
a perfect world I would want to use the cluster() world for this, but xttobit
does not have that option. If changing the id() option is not changing making
the standard errors robust (and ofcourse my coefficient estimates also change,
since my 'unit of observation' is now the district), what is it doing?

Many thanks for clues.

Jyotsna (Jo) Puri
Cell and Voicemail: 201-805-1690
[email protected]
Doctoral Candidate, Department of Agriculture and Resource Economics,
University of Maryland, College Park, MD

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