To create a Panel and run a Pooled OLS

Dear Sophie,

I think that the real question here is what you're trying to do; if you 
simply want to stack one cross section on top of the other, the simplest 
way to do that is with cbind.

To understand why your merge failed, just look at the merged data frame:

     > Cross1 <- data.frame(i=c(1,2,3),Y=c(3,2,2),X1=c(2,3,4))
     > Cross2 <- data.frame(i=c(1,2,3),Y=c(2,3,1),X1=c(5,6,7))
     > Panel <- merge(Cross1,Cross2,by="i")
     > Panel
     i Y.x X1.x Y.y X1.y
     1 1   3    2   2    5
     2 2   2    3   3    6
     3 3   2    4   1    7

On the other hand, here's what you get with rbind:

     > Panel <- rbind(Cross1, Cross2)
     > Panel
     i Y X1
     1  1 3  2
     2  2 2  3
     3  3 2  4
     11 1 2  5
     22 2 3  6
     33 3 1  7

Fitting a regression to this data frame works fine; either  OLS <- 
lm(Panel$Y ~ Panel$X1)  or  OLS <- lm(Y ~ X1, data=Panel)  will do the 
trick, although the latter is clearer, I think.

I hope that this helps,
  John

To create a Panel and run a Pooled OLS

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