# Tag Info

## New answers tagged applied-econometrics

0

Diff-in-Diff is a parametric model. A rule of thumb for parametric models is that you should have at least 25-30 observations (different authors might disagree but it is around 30) per independent regressor used in your model (see discussion in Verbeek A Guide to Modern Econometrics pp 36). However, note this is a rule of thumb and as Verbeek points out (my ...

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Short answer: No. Your model is $Y=\alpha + \beta X + \varepsilon$. Even when $X$ is exogenous, if you regress $Y$ on $X$, $W_1$ and $W_2$, then the OLS estimator is inconsistent (for $\beta$) unless $W_1$ and $W_2$ do not affect $Y$ on average (after controlling for $X$) or $X$ is uncorrelated with $W_1$ and $W_2$. When $X$ is endogenous, there is no reason ...

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There is an economic literature on optimal currency areas. However, that is related to the adoption of a single currency. As described in the question, a basket is just a new asset that is a weighted allocation to underlying currencies. Once the weightings are fixed, the fair value of the basket is the weighted value of the component currencies, which can be ...

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One way is to rely on a simple block bootstrap procedure. That is, you can draw $n$ contiguous blocks of length $t^{bs}$ (both LHS and RHS variables) which result in an overall bootstrapped sample of length $T$, which should be identical to the length of your original sample. Then repeat your estimation for each bootstrap sample and save your results, e.g. ...

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If $oil_t$ is the worldwide price of oil, neither $\rho$ nor $e_t$ are determined in a country specific model (unless the country's economy is so large that it affects global oil demand, which is not the case here). Because there is no feedback from domestic variables to the worldwide oil price $e_t$ is the structural shock if AR(1) is an appropriate model ...

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In your question you talk about coding so I will address primarily the question of coding. You should definitely code it using suggested 0 for a, 1 for b, 2 for c and 3 for d regardless of whether you plan to use it as ordinal variable or categorical variable. Let me explain, nowadays virtually any language or program will have option to easily turn ...

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The answer to your question: I wanted to know if it is possible to have an exhaustive set of things I need to test to be reasonably confident about the p-values I get, both overall and for each specific regressor's coefficient is "no", but for a different reason than is stated in the comments. To start this, let me ground you in what a p-value is ...

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First, there are substantial reasons to believe the data is not log-normal so it would be improper to assume log-normality. So, no you should not do that. You can research the literature on youth wages, it may have information on distributions. However, that is probably more than is necessary. There are two primary ways to estimate the standard deviation ...

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