Panel data and Chow test

[Roberto Villa]

Regarding Chow test

1. Can someone explain me Chow test for panel data and chow test for OLS? I know that panel data has the test for Poolability and OLS has the test for structural breaks
2. Does the test have the same interpretation when we run the test?

1. Can one run the Chow test using only one break interaction with one one variable but not the others but still insert other control variables?

regress y x1 x2 x3 x4

gen break =(year ==2019)
gen breakx1= break*x1

regress y x1 x2 x3 x4 if year== 2018|year ==2019

Regarding panel data

Also , is it possible to add interactions in Panel data ?
I get the error ... factor variables may not contain noninteger values

[Carlo Lazzaro]

Roberto:
1) https://www.stata.com/support/faqs/s...cs/chow-tests/
https://www.stata.com/support/faqs/s...how-statistic/

https://www.youtube.com/watch?v=agioyDKSFTM
2) yes, you can add interactions in the right-hand side panel data regression equation via -fvvarlist- notation;
3) the error message you got simply tells you that categorical variables should have levels numbered via integers. Double-check your variables.

[Roberto Villa]

Thank you Carlo Lazzaro
1.--But my question is , is there a difference to conduct a CHow test for Pooled OLS and for Panel data? Is it one for Structural Breaks and the other for poolability. I have seen the links you sent me already but they dont answer my question
2.-- Carlo sorry but I dont understand why I can interact my variables.

my variables are the mean of other variables:

y=Insurancecard (mean of a state)
x1=Low income(mean of a state)
x2=Middle income(mean of a state)
x3-high income(mean of a state)
x4=black(mean of a state)
x5 =white(mean of a state)
x6=asian(mean of a state)

this is a panle data

But when I try to interact


xtreg =x2+x3+x5+x6+ x1##x4 , fe

the error appears

what you mean by "t categorical variables should have levels numbered via integers"?

thank you

[Carlo Lazzaro]

Roberto:
1) the answer seems to be: yes, you can apply Chow test in panel data regression https://www.stata.com/statalist/arch.../msg00872.html

2) https://www.statalist.org/forums/for...integer-values