Panel data Analysis - Estimation using Stock Variables Instead of Flow Variables

[Catherine Brunet]

Hi,

It is my first time on this forum, I will try to be as concise and precise as possible.

I am trying to estimate the relationship between inequality and growth in a panel data of 22 countries for the period from 1985 to 2010, using fixed-effect and random effect. I want to use 5-years and 10-years period to do the estimation (to avoid endogeneity problems). The model is specified as follows:

(y_it+j - y_it)/a = BX_it-1 + u_it

Where:

y_it is the logarithm of the GNP per capita in country i at time t (the lefthand side is the growth rate);
a is the length of time chosen to break the panel periods (as such if I chose to take 5-years period breaks, I will have 5 periods of 5 years: 1986-1990, 1991-1995, 1996-2000, 2001-2005 and 2006-2010).
X_it-1 is the set of control variables whose values belong to the previous time period with the value chosen as close as possible to the year at the beginning of the period. (for instance, if I estimate the influence on the second period GNP growth rate from 1991 to 1995, my independent variables would need to be measured in 1986-1990, as close as possible to 1990).
u_it is the time varying error term.

As such, I want to know how to estimate such a model in Stata and how my data should be organized beforehand. More precisely, I am aware of the panel data commands to do fixed effects and random effects, but I would like to know how to insert 5 years and 10-years breaks in the data.

Thank you in advance for your assistance. Let me know if this isn't clear enough,

Catherine

[Steve Samuels]

Welcome to Statalist, Catherine! Unfortunately you've posted in the wrong forum (http://www.statalist.org/forums/forum). Repost in the General Forum, but without the photo, which is unreadable. If you want to show equations with symbols and subscripts, use Latex. See: http://www.statalist.org/forums/foru...available-here.
A couple of things that can bite: For inline math you must enclose with "\(" and "\)", not "$". For display math, you must enclose with "\[" and "\]", not "$$".

You can practice in the Sandbox Forum (I do). Unfortunately you can' actually see the typeset equations until you refresh your browser. For other editing features, push the "A" button next to the happy-face at the upper right of the edit window to use the Advanced Editor.