Stata Panel: Data

regress wage educ experience union i.year : Simple, high efficiency if no unobserved heterogeneity. Cons : Biased if unobserved factors (e.g., ability) correlate with regressors.

After FE, test for serial correlation:

Here, country_id is the panel variable, and year is the time variable. The single most important step in Stata panel data analysis is declaring your data structure using xtset . This command tells Stata which variable identifies the panels and which identifies the time dimension. Basic Syntax xtset panelvar timevar For our example: stata panel data

panel variable: country_id (strongly balanced) time variable: year, 2010 to 2011 delta: 1 unit means every panel has the same time periods. If some years are missing, you will see "unbalanced." Handling Unbalanced Panels Unbalanced panels are common (e.g., firms that enter or exit the sample). Stata handles them gracefully, but you must understand the implications for estimation. regress wage educ experience union i

xtreg wage experience union i.year, fe Or using the areg command: The single most important step in Stata panel