Dynamic unobserved effects model: Difference between revisions

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==Formulation==
A typical dynamic unobserved effects model is represented<ref>Wooldridge, J. (2002): Econometric Analysis of Cross Section and Panel Data, MIT Press, Cambridge, Mass, pp 495300.</ref> as:
 
P(y<sub>it</sub> = 1│y<sub>i,t-1</sub>, ... , y<sub>i,0</sub> , z<sub>i</sub> , c<sub>i</sub> ) = G (z<sub>it</sub> δ + ρ y<sub>i,t-1</sub> + c<sub>i</sub>)