13. Panel data Flashcards
What method should we use to carry out policy analysis using data with a time and a cross-sectional dimension?
Use differences in differences method
How can an independently pooled cross-section be defined?
- Random sampling from a large population
- but not the same individuals or properties in each time period
What does pooling data mean?
Combining the data sets together
How can we measure changes in our data using dummies?
Using time dummies
What does the Chow test measure?
Does your model stay the same across two different periods. It measures the level of structural change
What does the constant mean with dummy variables?
It means the people who don’t fall into any of those dummies
What do we have to assume to use the dif-in-dif model?
The parallel trends assumption
What does the parallel trends assumption assume?
Difference in difference only works if the difference in outcomes between the two groups is not changed by other factors than the policy change (no differential trends)