**********************
*** 2 period panel ***
**********************

use "C:\Users\royj\Dropbox\eco5720\Data Sets- STATA\CRIME2.DTA", clear

g citid = .

forval j = 1/46 {
	replace citid = `j' if _n==2*`j' | _n==(2*`j' - 1)
}

reg crmrte unem d87

* Removing the effect of d87 from unem
reg unem d87
predict runem, res
reg crmrte runem

* Accounting for city effect by first-differencing
reg ccrmrte cunem

* If we had to first difference
g yearid = .
replace yearid = 1 if year==82
replace yearid = 2 if year==87
xtset citid yearid
reg D.(crmrte d87 unem), nocons

twoway (scatter crmrte runem, sort xtitle("Unemployment Rate Removing 1987") ytitle("Crime Rate")) || (lfit crmrte runem, sort) || (scatter ccrmrte cunem, sort) || (lfit ccrmrte cunem, sort)

use "C:\Users\royj\Dropbox\eco5720\Data Sets- STATA\JTRAIN.DTA", clear
xtset fcode year
drop if year==1989

* OLS estimator
reg lscrap d88 grant

* First-differenced estimator
reg D.(lscrap d88 grant), nocons