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Polynomial relationship in panel data

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Polynomial relationship in panel data

I have a panel data sample and I analyzed an additive relationship between the independent variables using the following statement:

proc panel data=panel;
model A =B C /FIXONETIME ;
id name year;

Now, I would like to analyze a polynomial relationship between the explanatory variables using the following model: A = B + B*C.

When I try to do this using PROC PANEL, there is a need for a CLASS variable, but the consideration of B and C in the CLASS statement does not produce proper results.

What statement should I use?

Thank you in advance.
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Posts: 366

Re: Polynomial relationship in panel data

Posted in reply to Anastasia
Hello Anastasia,

I did not use proc PANEL but I looked into documentation and found the following line:
"The response variable on the left side of the equal sign is regressed on the independent variables listed after the equal sign." It relates to MODEL statement of the procedure. It means that it is necessary to create a variable, say bc=B*C in your Panel dataset and then use MODEL A = B BC /FIXONETIME;

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