Reputation: 231
If I estimated my model using the lm-function, I would be able to create Value-Added Plots typing the following code:
ols_model <- lm( log(y) ~ log(x1) + log(x2) + log(x3), data = data)
avPlots(ols_model)
However, I estimated my model using the plm-function because I'm using panel data methods.
fe_model <- plm( log(y) ~ log(x1) + log(x2) + log(x3),
model = "within",
data = data,
index = c("country","year"),
effect = "twoways")
How can I create Value-Added Plots in this case? My current solution is to replicate the same model with the lm-package (knowing that the standard errors are not correct) and to run the avPlots-command. So, basically I'm doing this:
fe_lm <- lm( log(y) ~ log(x1) + log(x2) + log(x3) + time_dummy1 + time_dummy2 + ... + country_dummy1 + country_dummy2 + ... , data = data)
avPlots(fe_lm)
However, now I'm not sure how to interpret the plots. Do I want to see a linear relationship between each pair of variables or rather a non-pattern?
Upvotes: 0
Views: 63