Week 10 · October 26–28
Follow the same units through time.
Begin Lecture 7, “Panel Data Models,” and apply the methods in Classwork 6. Connect environmental questions to repeated observations of the same units, and compare what pooled OLS, fixed effects, two-way fixed effects, and random effects use to estimate a relationship.
This week
Panel structure
- Identify the unit and time variables in a panel.
- Distinguish differences between units from changes within a unit.
- Explain why unobserved unit characteristics matter for environmental research.
Model comparison
- Compare pooled OLS, country fixed effects, two-way fixed effects, and random effects.
- State what each model controls for and which variation it uses.
- Explain the purpose of country-clustered standard errors.
Environmental application
- Use the Environmental Kuznets Curve to connect income and pollution.
- Interpret a quadratic specification and its implied turning point.
- Separate a fitted relationship from a causal claim.
Lecture slides
Classwork
Classwork 6: Panel Data Models
Build a clean country-year panel from the CO₂ data, estimate pooled OLS, fixed-effects, two-way fixed-effects, and random-effects models, and compare country-clustered standard errors and panel diagnostics. Use the results to interpret the Environmental Kuznets Curve and its estimated turning point.
By the end of Week 10
Be ready to:
- identify the unit and time dimensions of an environmental panel;
- explain the difference between within-unit and between-unit variation;
- compare the assumptions and controls in pooled OLS, fixed effects, two-way fixed effects, and random effects; and
- interpret clustered standard errors and an Environmental Kuznets Curve specification with appropriate caveats.