*
*  Example 11.6
*  J. Wooldridge, Econometrics of Cross Section and Panel Data
*
*  Note: The sample data files include all required data transformations.
*        However, in many cases we show how these data transformations would
*        be created in RATS from the basic data, as this is something you will
*        need to know how to do in practice.
*
cal(panelobs=14) 1980
all 51//14
open data prison.raw
data(format=free,org=columns) / state year govelec black metro unem criv crip $
 lcriv lcrip gcriv gcrip y81 y82 y83 y84 $
 y85 y86 y87 y88 y89 y90 y91 y92 $
 y93 ag0_14 ag15_17 ag18_24 ag25_34 incpc polpc gincpc $
 gpolpc cag0_14 cag15_17 cag18_24 cag25_34 cunem cblack cmetro $
 pris lpris gpris final1 final2
*
set lcriv = log(criv)
set lpris = log(pris)
set gcriv = lcriv-lcriv{1}
set gpris = lpris-lpris{1}
*
linreg gcriv
# gpris polpc incpc black metro unem ag0_14 ag15_17 ag18_24 ag25_34 govelec $
 y81 y82 y83 y84 y85 y86 y87 y88 y89 y90 y91 y92 y93
*
* The following generates the set of time dummies (in case you don't have a data
* set which already includes them). If you have just a few years, it's probably
* easiest to define them with separate set instructions, but with 14 years, using
* the vec[series] is going to be easier. Note, by the way, that this defines
* dummies for each year. Because the first period is knocked out of the sample
* for each individual, the first time dummy will be zero for all usable data
* points. Don't worry. It will just show as a zero with zero standard error, and
* won't be counted as a regressor in the summary statistics.
*
dec vect[series] tdummies(14)
do i=1,14
  set tdummies(i) = %period(t)==i
end do i
*
* Same regression done using the tdummies vector instead of the separate dummy
* variables.
*
linreg gcriv
# gpris polpc incpc black metro unem ag0_14 ag15_17 ag18_24 ag25_34 govelec $
 tdummies
*
* 2SLS using the two "final decision" dummies as instruments for the growth in
* prison population.
*
instruments polpc incpc black metro unem ag0_14 ag15_17 ag18_24 ag25_34 govelec tdummies $
  final1 final2
linreg(instruments) gcriv
# gpris polpc incpc black metro unem ag0_14 ag15_17 ag18_24 ag25_34 govelec $
 tdummies