I am trying to run a panel unit root test using the PESCADF command in Stata. However I am confused about selecting the lag order. I find that when I keep my lag order at 4, the test concludes that that the variable is stationary, and if if I bring it any lower the test results shows that variable is non-stationary. Could anyone please advise me on what to do? Is there a criteria for selecting lag order? Thanks in advance.
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