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Reverse Causality Test with Panel Data
Reverse Causality Test with Panel Data

Hi there,

I was wondering if it was possible for some assistance on how to carry out a reverse causality test with panel data from 1997-2016. I am aware the Granger model uses VAR - but how does this work with panel data as when I try and log my dependent variable I get syntax error ' repeated time values in sample'.

My original regression is examining how the consumption of gin affects alcohol-related deaths, controlling for total expenditure on healthcare (TEH), gross domestic household income (GDHI) and drinking behaviour (DB).

ARD_it = a_o +a₁Consumption_it +a₃TEH_it +a₂GDHI_it +a₁DB_it + dyear +e_1it

The coefficients between ARD and TEH suggest a strong positive correlation - so I want to examine the reverse causality between this.

Any help would be greatly appreciated.

Carys

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