First differenced equation

[johnf]

Hi,

Can someone please help a beginner with the example from the book of Wooldridge "Introductory econometrics: a modern approach", 5th edition, page 462, equation 13.18. I don't know how to get those coefficients? He was using CRIME2.RAW file (in the attachment).

The first differenced estimated equation from the book looks like this: Δcrmrte = 15.40 + 2.22 Δunem.

I've been using following commands and OLS: D(crmrte) c D(unem).

What am I missing?

Many thanks.

[startz]

You need to look more carefully at how your data is organized. Hint: How many observations do you have compared to Wooldridge?

[johnf]

There are total 92 observations in the CRIME2.RAW - crmrte and unem.

[startz]

How many observations in the textbook equation?

[johnf]

If am right, what I actually need to do is to subtract row2-row1, row4-row3, etc. from crmrte and unem?

Can you help to do this in EViews?

[startz]

You probably want to set the sample to only include certain observations. Take a look at the smpl if command.

[johnf]

Can you please suggest how to include every second value with smpl if?