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RE: st: RE: constant variable as IV in panel?

From   Nick Cox <>
To   "''" <>
Subject   RE: st: RE: constant variable as IV in panel?
Date   Thu, 23 Jun 2011 11:28:39 +0100

I see. In principle, that percent could change minutely from year to year in some cases if you defined climate using a moving window. In practice, it would be a substantial project in itself to define such a variable and unlikely to be worth it given your larger project. 


Matthias Opfinger

Thanks for the remark. Actually I try to instrument national identity. 
The instrument I want to use is the percentage of the land mass in 
temperate climatic zones. In a cross section that worked quite well, but 
I'm not sure how to use this in a panel setting.

Am 23.06.2011 11:36, schrieb Nick Cox:
> There are many instrumental variable experts on the list who are better placed than I to comment on that side.
> I just want to point out that the implicit climatology here is fallacious, not that it needs a geographer who has occasionally published on climate to point it out. Whatever scheme of climatic zones is being considered here, and there are many standards to choose from,
> 1. it won't be true for most if not all large countries that they fall in just one climatic zone (think Russia, China, Brasil, USA, etc.)
> 2. it won't even be true for many smaller countries
> 3. the assumption that the climate is unchanging is also incorrect, although probably less important than 1 or 2 for this study.
> More positively, climatic zonation throws away information that is encoded in variables like precipitation, temperature, etc. but using the latter will underline the heterogeneity problem identified in 1 and 2.
> Nick
> Matthias Opfinger
> I want to estimate a panel model with observations on approx. 90
> countries for five points in time between 1980 and 2005. However, one of
> my explanatory variables is endogeneous. The only possible instrument is
> a variable on climatic zones. So it would be the same for each country
> over all points in time. How can I put this into my model? Do I just put
> the same value for each country over all the points in time and then use
> xtivreg?

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