st: Question on controlling for associated observations

[Elena Quercioli <elena.liquorice@gmail.com>]

Dear Statalist-ers,

I need to formulate in STATA a panel regression in which I tie down
pairs of observations to have the same fixed effects.  In my case  (I
am using a random effects MLE estimation procedure) I have a set of
data for counties along time zone lines. I want to
estimate the effect on the observations of landing on the west side of
the time zone line. Of course, I also have other controls. But I want
to think of the counties that are adjacent as pairs (clusters of two),
and thus estimating a 'common fixed effects' through the years.

To be clear my panel regression is:

y_itk = a_0 + a_1*dummy1_ik + a_2*dummy2_ik + a_3*dummy3_i + epsilon_i
+ epsilon_t + epsilon_it + epsilon_itk

Where i is the county identifier, t is years in panel and k is west.

I am testing the significance of the coefficient a_1 of west (dummy1_ik=1)

Does anyone know how to do this? Thank you in advance for your help.

Elena

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