Dear all:
I would like to run a regression on residual_income. I have yearly observations of residual income for firms. The year is given in variable "year", the identifier for firm is "name".
I'd like to run the regression residual_income(year) = b0 + b1 * residual_income(year-1) + e The regression should run on "residual_income" over every two consecutive years ("year") within each identifier "name" (whenever there are values for at least two consecutive years for a given name).
I used the following, but my results are not what I expected:
tsset name year
reg residual_income l.residual_income
Hope someone can help me. Thanks for your consideration.
Greg B.
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