Consistent and Balanced Panels
To reiterate the gist of the explanation given in Chapter 3, balanced panels simply mean that each i has the same number of t observations. In our case, this means that if one country covers 9 years’ worth of data, then all countries cover 9 years’ worth of data. Which years each country covers is not an issue with the concept of balanced panels; this is where consistent panels come into play. Consistency in panel data simply means that each of the balanced panels start in the same year and end in the same year. Therefore, you can have balanced but inconsistent panels, but you cannot have consistent but unbalanced panels.
There are perhaps three main reasons why researchers don’t, or won’t, recognize ...
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