**  Pooled-Nested Example:  Contextual Earnings Models for White Females 
log using x:\Pooled_Nested_example_out.log, replace

infix raceth 1 female 2 occ80 3-5 ind2d 6-7 ernuslwk 8-11 ed 12-13 hrsusual 14-15 potexp 16-17  ///
     potexpsq 18-21  public 22  married 23  kids 24  skill 25-31  pfem 32-39  phisp 40-47 ///
     pblk 48-55 using "s:\fac\rlk\703\occearnwf.dat"

xi i.ind2d,noomit
renpfix _Iind2d_   ind
summarize

global ivars = "ed hrsusual potexp potexpsq public married kids skill pfem pblk phisp"
regress ernuslwk  $ivars

**  COMMENT  Lagrange-Multiplier test for Occupation Error 
lmtest  ernuslwk  1  occ80

**  COMMENT  Run FEM for Occupation Error 
xtreg ernuslwk  $ivars, fe i(occ80) 

**  COMMENT  Run REM for Occupation Error 
xtmixed ernuslwk  $ivars || occ80: 



**  COMMENT  Lagrange-Multiplier test for Industry error 
lmtest  ernuslwk  1  ind2d

**  COMMENT  Run FEM for Industry Error 
xtreg ernuslwk  $ivars, fe i( ind2d) 
est store fixed

**  COMMENT  Run REM for Industry Error 
xtmixed ernuslwk  $ivars || ind2d:
est store random

**  COMMENT  Hausman test of FEM vs. REM for Industry Error 
hausman fixed random, eq(1:1)



**  COMMENT  Lagrange-Multiplier test for Occupation & Industry Errors 
lmtest  ernuslwk  2  occ80  ind2d

**  COMMENT  Run REM for Occupation Error and FEM for Industry Error 
xtmixed ernuslwk  $ivars ind1-ind35 || occ80:
mixedvars  
glsbeta ernuslwk

**  COMMENT  Get 1 REM  component Buse's R Squared and Squared Correlation Observed, Predicted Y 
busepool ernuslwk 1 occ80





**  COMMENT  Run REM for both Occupation Error and Industry Error 
xtmixed ernuslwk  $ivars || _all: R.ind2d || occ80: 
glsbeta ernuslwk  

**  COMMENT  Get 2 REM component Buse's R Squared and Squared Correlation Observed,  Predicted Y 
busepool ernuslwk 2 ind2d occ80


**  COMMENT  F-tests for 1 & 2 Component FEMs for Occ & Industry Errors w/o Context Measures
global ivars = "ed hrsusual potexp potexpsq public married kids"
femftest  ernuslwk  ind2d  occ80 


**   COMMENT   Get OLS Corrected Standard Errors for  1 Component Clustering by Occupation
global ivars = "ed hrsusual potexp potexpsq public married kids skill pfem pblk phisp"
regress ernuslwk  $ivars, cluster(occ80) 

**  COMMENT  Get OLS Corrected Standard Errors for 2 Component Clustering by Occupation & Industry
egen  id2comp =  group(occ80  ind2d)
regress ernuslwk  $ivars, cluster(id2comp)