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rplm

What is the meaning of "|" in R

I'm watching a video on YouTube about linear regression, one line of code is like this (function pgmm of package plm):

model1 = pgmm(democracy~lag(democracy)+lag(income)|lag(democracy, 2:99), DemocracyIncome25, index=c("country", "year"), model="twosteps", effect="twoways")

Just want to know what is the meaning of | here, and what does this operation really do.

Solution

  • In general the | represents the logical OR operator, but in the pgmm function the | sign is used to provide the instrumental variables that you want to use in your panel data GMM.

    in your sample code model1 = pgmm(democracy~lag(democracy)+lag(income)|lag(democracy, 2:99), DemocracyIncome25, index=c("country", "year"), model="twosteps", effect="twoways") you have the dependent variable democracy and independent variables as lag of democracy and lagged income. The variables after the | lag(democracy, 2:99), DemocracyIncome25 will act as instrumental variables.

    Please refer to the page 17 of the plm documentation here to the page 17 of the plm package documentation here