I need to have a full idea about how and when I can use Panel Data Analysis
Panel data is used when you have to check variability across time and variables.
There are many reasons why to use Panel data. Generally, researchers have preferred panel data over cross-sectional data due to several advantages of the former. Hsiao (1985), Baltagi (2008) and Wooldridge (2010) have persuasively explained the benefits of using panel data in empirical analyses. Generally, it is agreed that panel data can provide more accurate inferences of model parameters, greater capacity to capture the complexity of human behavior, more simplified computation and statistical inference. However, it should also be kept in mind that panel data has its disadvantages too. Most often, panel datasets suffer from intertemporal dependencies, autocorrelation, endogeneity and other aspects of statistical problems, which may not be an issue in cross-sectional data. Moreover, panel data collection is resource-intensive (requires a lot of time, manpower and monetary commitments); hence, many researchers choose cross-sectional data to meet the constraints of resources. However, given the rapid development of econometric techniques to addresses the issues in panel data and the availability of secondary sources, a panel data is preferred over cross-sectional data. Specially when you want to analyse dynamic relationship of DV and IV, then panel data is inevitable (copying from one of my research project).
this is one of the great piece of reference if you want to analyse panel data in STATA.
http://www.princeton.edu/~otorres/Panel101.pdf
I hope that helps.
As per my little understanding, data type (time-series/cross-section/panel) depends on the nature of the study and/or the way a researcher expected to conduct her/his study. However, the given flowchart may help you to conduct a study with a panel data set.
Dear Zaroug,
Panel data is majorly employed to examine the dynamic relationship among variable. They tend to provide accurate statistical inferences in a model.
But the problem of of endogeneity and autocorrelation are the major constraint.
Regards
I think Dr. Md Aslam Mila addresses your question very well. Moreover, Panel data contains more information, more variability, and more efficiency as compared to any time series data. You may follow this link for more details:
https://www.aptech.com/blog/introduction-to-the-fundamentals-of-panel-data/
I need to have a full idea about how and when I can use Panel Data Analysis
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