Lag Dependent Variable with lfe package

Hi everyonne,
I am currently running certain regression models with the felm function from the lfe package. Now I want to run 2 model versions with a lagged dependent variable. I want to lag my dependent variable by 1 year and include it as independent variable in order to capture path dependence. Furthermore both models have to have fixed time and country effects.

My normal versions (including fixed effects for "year" and "id" look as follows:

Model3 <- felm(y ~ x + control1 + control2 + + control 3 + control4 | factor(year) + factor(id), data_stata)

Model4 <- felm(y ~ x1 + control1 + control2 + control3 + control4 | factor(year) + factor(id), data_stata)

I found this option below, but it is not working for me:

Model3 <- felm(y ~ lag(data_stata)['y'],1) + x + control1 + control2 + control3 | factor(year) + factor(id),

If someone could help me with my issue I would highly appreciate it :slight_smile:
Thanks a lot!

This topic was automatically closed 21 days after the last reply. New replies are no longer allowed.