Chapter 28. Working with Panel Data

874—Chapter 28. Working with Panel Data

Here, we create a balanced quarterly panel (ranging from 1970Q1 to 2020Q4) with 200 cross-sections.

When you click on OK, EViews will create an appropriately structured workfile with 40,800 observations (51 years, 4 quarters, 200 cross-sections). You may then enter or import the data into the workfile.

More commonly, you will use the second method of structuring a panel workfile, in which you first read stacked data into an unstructured workfile, and then apply a structure to

the workfile. While there are a number of issues involved with this operation, let us consider a simple, illustrative example of the basic method.

Suppose that we have data for the job training example considered by Wooldridge (2002), using data from Holzer, et al. (1993).

These data form a balanced panel of 3 annual observations on 157 firms. The data are first read into a 471 observation, unstructured EViews workfile. The values of the series YEAR and FCODE may be used to identify the date and cross-section, respectively, for each observation.

To apply a panel structure to this workfile, simply double click on the “Range:” line at the top of the workfile window, or select Proc/Structure/Resize Current Page... to open the

Workfile structure dialog. Select Dated Panel as our Workfile structure type.

876—Chapter 28. Working with Panel Data

Here we see the top portion of an annual workfile with observations from 1935 to 1954 for 10 cross-sections. Note that workfile sample is described using the earliest and latest observed annual frequency dates (“1935 1954”).

In contrast, an undated panel workfile will display an observation range of 1 to the total number of observations. The panel dimension statement

will indicate the largest number of observations in a cross-section and the number of crosssections. Here, we have 92 cross-sections containing up to 30 observations, for a total of 506 observations. Note that the workfile sample is described using the raw observation numbers (“1 506”) since there is no notion of a date pair in undated panels.

You may, at any time, click on the Range display line or select Proc/WF Structure & Range... to bring up the Workfile Structure dialog so that you may modify or remove your panel structure.

Observation Labels

The left-hand side of every workfile contains observation labels that identify each observation. In a simple unstructured workfile, these labels are simply the integers from 1 to the total number of observations in the workfile. For dated, non-panel workfiles, these labels are representations of the unique dates associated with each observation. For example, in an annual workfile ranging from 1935 to 1950, the observation labels are of the form “1935”, “1936”, etc.

In contrast, the observation labels in a panel workfile must reflect the fact that observations possess both cross-section and within-cross-section identifiers. Accordingly, EViews will form observation identifiers using both the cross-section and the cell ID values.

Here, for example, we see the labels for a panel annual workfile structured using ID as the crosssection identifier, and DATE as the cell ID (we have widened the observation column so that the full observation identifier is visible). The labels have been formed by concatenating the ID value, a hyphen, and a two-digit representation of the date.

Note that EViews generally uses the display formats for the cross-section and cell ID series when forming the observation label. For example, since ID is displayed using 7 fixed char-