The model to estimate is :
Surplus primaire ti= a1 surplus primaire ti-1+a2 debti-1+…..+eit.
When i run the unit root test i found thant all the variables are stationary expect the variable debti-1 where is I(1).
Then If I estimate this model :
surplus primaire ti= a1 surplus primaire ti-1+ a2 ∆debti-1+…..+eit.
It means I differentiate the debt variable .
My question :this latter specification can be validated .
My second question also if this variable is I(2) .
if I differentiate “two times” can also the specification hold ?
Thank you for your help .
Related Posts with Problem of model specification*
Dynamic panel approach for large THello everybody, I have data for a small number of countries (12) and a large number of observation…
how to compare the trend of risk ratios across age groups, between cases and controlsHi, I used binomial regression to calculate the risk ratio of outcomes (e.g. diabetes, renal failur…
Internal choiceDear all, Please help me with this issue. My data is as follows. Respondents were asked 5 times. I a…
Can't import 2011 India district shapefileWe need a 2011 India district shapefile (N=640 districts). I found a handful around the web (e.g., S…
Panel data - first differences modelI am using panel data (world bank's world development indicators). Need to create a first difference…
Subscribe to:
Post Comments (Atom)
0 Response to Problem of model specification*
Post a Comment