# 2.2 Panel data models  (Page 6/10)

 Page 6 / 10

Additionally, because race is a categorical variable that has three potential values—1 if white, 2 if black, and 3 otherwise—we have to create a dummy variable in order to use this variable. The transformations we use are shown in Figure 3.

The last step before estimating the regressions is to identify the data set as a panel data. shows the two commands that must be entered in order for Stata to know that idcode is the individual category and that year is the time series variable. Figure 4 shows these two commands.

We are now ready to estimate the model (the natural logarithm of wages as a function of various variables). We begin with the random-effects model. Figure 5 shows the command and the results of the estimation of the random-effects model. There are several things to note here. First, in the command we are able to refer to all variables that have age in them by using age* , the * tells Stata to use and variable that begins with the letters age. Second, we will need to use the estimation results in the Hausman test. Thus, we have stored these results in “random_effects” using the command estimates store random_effects .

Notice that three R-squared values are reported in Figure 5. Also, wages reach a peak when the woman is $-\frac{0.036806}{2\left(-0.0007133\right)}=25.7998$ years old and after 9.795857 years on the job. The interpretation of the other variables demands a bit of algebra. For instance, the fact that black is a dummy variable affects our interpretation; when an individual is a black, her wage level is: $\mathrm{ln}{w}_{B}={\beta }_{0}+{\beta }_{1}+\cdots .$ When she is nonblack, her wage level is $\mathrm{ln}{w}_{NB}={\beta }_{0}+\cdots .$ Thus, we have: $\mathrm{ln}{w}_{B}-\mathrm{ln}{w}_{NB}={\beta }_{1}$ or $\frac{{w}_{B}}{{w}_{NB}}={e}^{{\beta }_{1}}={e}^{-0.0530532}=0.94833.$ Thus, the wage level of a black is, everything else held constant, 94.8 percent of the wage level of a nonblack.

If we assume that grade is a continuous variable (it really is not), we have the following interpretation of the parameter: $\mathrm{ln}w={\beta }_{0}+{\beta }_{1}grade+\cdots$ implies that $\frac{1}{w}\frac{\partial w}{\partial grade}={\beta }_{1}$ . Thus, in our case a increase of 1 year of schooling causes wages to increase by 6.46 percent.

We can compare the results of using the re option with using the mle option (which directs Stata to use maximum likelihood techniques to estimate the parameters of the system. The mle parameter estimates, shown in Figure 6, are the same as those generated using the re command. However, the estimates of the standard errors (and, thus, the z-values) are different.

The estimation of the fixed-effects model is straightforward and is shown in Figure 7. The command is the same as in the random-effects model but with the re replaced by fe . Notice from the results that the variables grade and black are dropped from the estimation results. They are dropped because the amount of schooling and race of an individual is fixed over all observations. These two variables, thus, are perfectly correlated with the dummy variables that hold constant the individual level characteristics. The effects of education and race differences are absorbed into the residual.

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yeah
Joseph
Hello, if I study Physics teacher in bachelor, can I study Nanotechnology in master?
no can't
Lohitha
where we get a research paper on Nano chemistry....?
nanopartical of organic/inorganic / physical chemistry , pdf / thesis / review
Ali
what are the products of Nano chemistry?
There are lots of products of nano chemistry... Like nano coatings.....carbon fiber.. And lots of others..
learn
Even nanotechnology is pretty much all about chemistry... Its the chemistry on quantum or atomic level
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da
no nanotechnology is also a part of physics and maths it requires angle formulas and some pressure regarding concepts
Bhagvanji
hey
Giriraj
Preparation and Applications of Nanomaterial for Drug Delivery
revolt
da
Application of nanotechnology in medicine
has a lot of application modern world
Kamaluddeen
yes
narayan
what is variations in raman spectra for nanomaterials
ya I also want to know the raman spectra
Bhagvanji
I only see partial conversation and what's the question here!
what about nanotechnology for water purification
please someone correct me if I'm wrong but I think one can use nanoparticles, specially silver nanoparticles for water treatment.
Damian
yes that's correct
Professor
I think
Professor
Nasa has use it in the 60's, copper as water purification in the moon travel.
Alexandre
nanocopper obvius
Alexandre
what is the stm
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Rafiq
industrial application...? mmm I think on the medical side as drug carrier, but you should go deeper on your research, I may be wrong
Damian
How we are making nano material?
what is a peer
What is meant by 'nano scale'?
What is STMs full form?
LITNING
scanning tunneling microscope
Sahil
how nano science is used for hydrophobicity
Santosh
Do u think that Graphene and Fullrene fiber can be used to make Air Plane body structure the lightest and strongest. Rafiq
Rafiq
what is differents between GO and RGO?
Mahi
what is simplest way to understand the applications of nano robots used to detect the cancer affected cell of human body.? How this robot is carried to required site of body cell.? what will be the carrier material and how can be detected that correct delivery of drug is done Rafiq
Rafiq
if virus is killing to make ARTIFICIAL DNA OF GRAPHENE FOR KILLED THE VIRUS .THIS IS OUR ASSUMPTION
Anam
analytical skills graphene is prepared to kill any type viruses .
Anam
Any one who tell me about Preparation and application of Nanomaterial for drug Delivery
Hafiz
what is Nano technology ?
write examples of Nano molecule?
Bob
The nanotechnology is as new science, to scale nanometric
brayan
nanotechnology is the study, desing, synthesis, manipulation and application of materials and functional systems through control of matter at nanoscale
Damian
Is there any normative that regulates the use of silver nanoparticles?
what king of growth are you checking .?
Renato
how did you get the value of 2000N.What calculations are needed to arrive at it
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