On Sat, 5 Apr 2003, Phillip Y. Lipscy wrote:
Hi Kosuke/Gary,
I have a question about first differences in our replication. Hiscox uses
Clarify to calculate the first differences for several variables and gets the
"effects estimated for change in each variable from minimum (0) to maximum (1)
values for equations including only that variable and bill dummies."
So two questions:
1. Does it make sense to vary the variables from 0 to 1 in a given period, when,
for example, the empirical maximum value for the variable never exceeds 0.3?
Would it be better to vary it from 0 to 0.1 or something? In this case, 1 is
not even a "maximum" because in other periods, it takes on values like
"1.3"
(i.e. there's no theoretical reason why 1 would be priviledged).
good question. and you have the right intuition. the answer depends on
whether the counterfactual is reasonable. if you find that inflation
influences pres'l approvial, you wouldn't ask (in the u.s.) what approval
would be if inflation were 200%! what's right in this case is a matter of
theory, not data, but there are some things that can be said. have a look
at my paper on counterfactuals (when can history be our guide) with
Langche Zeng at my web site under Preprints.
2. Is it OK to leave all other explanatory variables
out of the equation when
calculating first differences? Or is it better to hold them to their
mean/median, or does it make any difference?
do you want to control for these explanatory vars? if so then you must do
it explicitly by including them and holding them constant (which is the
same thing as controlling for them).
Gary
I'm specifically talking about Table 2 (p.9), footnote b (i'll attach the
article in case you want to look at it).
Thanks!
Phillip.
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Phillip Y. Lipscy
Perkins Hall Room #129
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Cambridge, MA 02138
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lipscy(a)fas.harvard.edu
http://www.people.fas.harvard.edu/~lipscy/
First Year Student, Ph.D. Program
Harvard University, FAS, Department of Government
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