Panel in R

In this section we shall discuss how to deal with panel data and how to use econometric techniques that exploit the additional analysis that can be performed due to the Panel character of data.

A lot of this material repeats material that is discussed in this YouTube clip [1].

The plm package

To deal efficiently with panel data we will need the plm package and you need to downlaod it (install.packages("plm")) and load it into the workspace (library(plm)) in the usual manner.

Details for this package can be found here.

Example Data

Here we are using the Crime Statistics dataset for illustration. It is used in Example 13.9 in Wooldridge's Introductory Econometrics.

Set-up of Panel

Here is our initial data load-up

    library(plm)
    setwd("X:/ECLR/R/PanelData")              # This sets the working directory
    # Opens mroz.csv from working directory
    # converts variables with "." to num with NA
    mydata <- read.csv("crime4.csv",na.strings = ".") 

So far we have merely uploaded the csv file. It is worth having a look at the data at this stage

    pdata <- plm.data(mydata, index = c("county","year")) # defines the panel dimensions