Suppose that you have panel data from an experiment with T = 2 periods (so t =
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where αi are individual fixed effects, Dt is the binary variable that equals 1 if t = 2 and equals 0 if t = 1, Dt à Wi is the product of Dt and Wi, and the α's and β's are unknown coefficients. Let Yi = Yi2 - Yi1. Derive Equation (13.6) (in the case of a single W regressor, so r = 1) from this population regression model.
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Related Book For
Introduction to Econometrics
ISBN: 978-0133595420
3rd edition
Authors: James H. Stock, Mark W. Watson
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