*Install necessary packages
ssc install ivreg2
ssc install xtivreg2
ssc install ranktest

set matsize 800
set more off

use Michler_Balagtas.dta, clear

*********************************************************************
****Generate Variables for Regressions*******************************
*********************************************************************

*Consumption Growth
sort VDSA_HH_id tindex
gen LnC_t = ln(Con_per_cap)
by VDSA_HH_id: gen LnC_tp1 = LnC_t[_n+1]
gen LnC = LnC_tp1-LnC_t
label variable LnC "Log Consumption Growth from t to t+1"
drop LnC_t LnC_tp1
order LnC, before(Stn_Name)

*Scale Term
gen scale_mon=( Inc_per_cap/ Con_per_cap)^2
label variable scale_mon "(Y/c)^2"

*Scaled Rainfall Variable
gen sP6_SD=scale_mon*SD_pre6
label variable sP6_SD "Scaled 6 Month Rainfall Variance"

gen sP4_SD=scale_mon*SD_pre4
label variable sP4_SD "Scaled 4 Month Rainfall Variance"

*Generate village time interactions terms
xi I.Vil_id*I.tindex, prefix(X_)

*********************************************************************
****Table 1**********************************************************
*********************************************************************

sort Quarter
by Quarter: sum Inc_per_cap Con_per_cap Land pre_6mon scale_mon sP6_SD


*********************************************************************
****Table 2**********************************************************
*********************************************************************

xtset VDSA_HH_id tindex


****OLS Regression, Panel A, Column 1********************************

reg LnC sP6_SD Land X_Vil_id_102-X_VilXtin_112_32, vce(cluster VDSA_HH_id)


****First Stage IV, Panel B, Column 2********************************

*Generate Variables for IV
sort VDSA_HH_id tindex
by VDSA_HH_id: gen scale_t1=scale_mon[_n-1]
label variable scale_t1 "1 mon lag of scale term"
by VDSA_HH_id: gen scale_t2=scale_mon[_n-2]
label variable scale_t2 "2 mon lag of scale term"

order scale_t1 scale_t2, after(sP4_SD)

regress scale_mon scale_t1 scale_t2 Land X_Vil_id_102-X_VilXtin_112_32, cluster( VDSA_HH_id )
 
*generate IV
predict double IVhat
label variable IVhat "predicted value for scaled term"

gen IV_P6=IVhat*SD_pre6
label variable IV_P6 "IV of Scaled Term"


****IV Regression, Panel A, Column 2*********************************

ivregress gmm LnC Land X_Vil_id_102-X_VilXtin_112_32 (sP6_SD = IV_P6), wmatrix(cluster VDSA_HH_id ) 


****FD Regression, Panel A, Column 3*********************************

reg d.LnC d.sP6_SD d.Land X_Vil_id_102-X_VilXtin_112_32, vce(cluster VDSA_HH_id )


****First Stage FDIV, Panel B, Column 2******************************

*generate FDIV
regress d.scale_mon scale_t1 scale_t2 d.Land X_Vil_id_102-X_VilXtin_112_32, vce(cluster VDSA_HH_id )

predict double dIVhat
label variable dIVhat "First Difference predicted value for scaled term"

*generate FDIV
gen dIV_P6=dIVhat*SD_pre6
label variable dIV_P6 "First Difference IV of Scaled Term"

order dIVhat dIV_P6, before(X_Vil_id_102)


****FDIV Regression, Panel A, Column 4*******************************

ivregress gmm d.LnC d.Land X_Vil_id_102-X_VilXtin_112_32 (d.sP6_SD = dIV_P6), wmatrix(cluster VDSA_HH_id )


*********************************************************************
****Generate Variables for Quartile Regressions**********************
*********************************************************************

gen scale_1 = scale_mon if Inc_quart==1
replace scale_1 = 0 if Inc_quart!=1
gen scale_2 = scale_mon if Inc_quart==2
replace scale_2 = 0 if Inc_quart!=2
gen scale_3 = scale_mon if Inc_quart==3
replace scale_3 = 0 if Inc_quart!=3
gen scale_4 = scale_mon if Inc_quart==4
replace scale_4 = 0 if Inc_quart!=4

order scale_1 scale_2 scale_3 scale_4, after( scale_mon )

*Scaled Rainfall Variable
gen s_1_P6_SD=scale_1*SD_pre6
label variable s_1_P6_SD "Quartile 1 Scaled 6 Month Rainfall Variance"

gen s_2_P6_SD=scale_2*SD_pre6
label variable s_2_P6_SD "Quartile 2 Scaled 6 Month Rainfall Variance"

gen s_3_P6_SD=scale_3*SD_pre6
label variable s_3_P6_SD "Quartile 3 Scaled 6 Month Rainfall Variance"

gen s_4_P6_SD=scale_4*SD_pre6
label variable s_4_P6_SD "Quartile 4 Scaled 6 Month Rainfall Variance"


*********************************************************************
****Table 4**********************************************************
*********************************************************************


****OLS Regression, Column 1*****************************************

reg LnC s_1_P6_SD s_2_P6_SD s_3_P6_SD s_4_P6_SD Land I.Vil_id##I.tindex, vce(cluster VDSA_HH_id)


****First Stage IV, Not reported*************************************

*IV for Correlated Measurement Errors
by VDSA_HH_id: gen scale_1_t1=scale_1[_n-1]
label variable scale_1_t1 "Quartile 1 1 mon lag of scale term"
by VDSA_HH_id: gen scale_1_t2=scale_1[_n-2]
label variable scale_1_t2 "Quartile 1 2 mon lag of scale term"

by VDSA_HH_id: gen scale_2_t1=scale_2[_n-1]
label variable scale_2_t1 "Quartile 2 1 mon lag of scale term"
by VDSA_HH_id: gen scale_2_t2=scale_2[_n-2]
label variable scale_2_t2 "Quartile 2 2 mon lag of scale term"

by VDSA_HH_id: gen scale_3_t1=scale_3[_n-1]
label variable scale_3_t1 "Quartile 3 1 mon lag of scale term"
by VDSA_HH_id: gen scale_3_t2=scale_3[_n-2]
label variable scale_3_t2 "Quartile 3 2 mon lag of scale term"

by VDSA_HH_id: gen scale_4_t1=scale_4[_n-1]
label variable scale_4_t1 "Quartile 4 1 mon lag of scale term"
by VDSA_HH_id: gen scale_4_t2=scale_4[_n-2]
label variable scale_4_t2 "Quartile 4 2 mon lag of scale term"

order scale_t1 scale_t2 scale_1_t1 scale_1_t2 scale_2_t1 scale_2_t2 scale_3_t1 scale_3_t2 scale_4_t1 scale_4_t2, after(s_4_P6_SD)

*generate IV IVs
regress scale_1 scale_1_t1 scale_1_t2 Land I.Vil_id##I.tindex, cluster( VDSA_HH_id )
predict double IV_1hat
label variable IV_1hat "Quartile 1 predicted value for scaled term"

regress scale_2 scale_2_t1 scale_2_t2 Land I.Vil_id##I.tindex, cluster( VDSA_HH_id )
predict double IV_2hat
label variable IV_2hat "Quartile 2 predicted value for scaled term"

regress scale_3 scale_3_t1 scale_3_t2 Land I.Vil_id##I.tindex, cluster( VDSA_HH_id )
predict double IV_3hat
label variable IV_3hat "Quartile 3 predicted value for scaled term"

regress scale_4 scale_4_t1 scale_4_t2 Land I.Vil_id##I.tindex, cluster( VDSA_HH_id )
predict double IV_4hat
label variable IV_4hat "Quartile 4 predicted value for scaled term"

*generate IV interactions
gen IV_1_P6=IV_1hat*SD_pre6 if Inc_quart==1
replace IV_1_P6=0 if Inc_quart!=1
label variable IV_1_P6 "Quartile 1 IV of Scaled Term"

gen IV_2_P6=IV_2hat*SD_pre6 if Inc_quart==2
replace IV_2_P6=0 if Inc_quart!=2
label variable IV_2_P6 "Quartile 2 IV of Scaled Term"

gen IV_3_P6=IV_3hat*SD_pre6 if Inc_quart==3
replace IV_3_P6=0 if Inc_quart!=3
label variable IV_3_P6 "Quartile 3 IV of Scaled Term"

gen IV_4_P6=IV_4hat*SD_pre6 if Inc_quart==4
replace IV_4_P6=0 if Inc_quart!=4
label variable IV_4_P6 "Quartile 4 IV of Scaled Term"

order IVhat IV_1hat IV_2hat IV_3hat IV_4hat IV_P6 IV_1_P6 IV_2_P6 IV_3_P6 IV_4_P6, after(scale_4_t2)



****IV Regression, Column 2******************************************

ivregress gmm LnC Land X_Vil_id_102-X_VilXtin_112_32 (s_1_P6_SD s_2_P6_SD s_3_P6_SD s_4_P6_SD = IV_1_P6 IV_2_P6 IV_3_P6 IV_4_P6), wmatrix(cluster VDSA_HH_id ) 


****FD Regression, Column 3******************************************

reg d.LnC d.s_1_P6_SD d.s_2_P6_SD d.s_3_P6_SD d.s_4_P6_SD d.Land I.Vil_id##I.tindex, vce(cluster VDSA_HH_id )


****First Stage FDIV, Not reported***********************************

*generate FDIV IVs
regress d.scale_1 scale_1_t1 scale_1_t2 d.Land I.Vil_id##I.tindex, cluster( VDSA_HH_id )
predict double dIV_1hat
label variable dIV_1hat "Quartile 1 FD predicted value for scaled term"

regress d.scale_2 scale_2_t1 scale_2_t2 d.Land I.Vil_id##I.tindex, cluster( VDSA_HH_id )
predict double dIV_2hat
label variable dIV_2hat "Quartile 2 FD predicted value for scaled term"

regress d.scale_3 scale_3_t1 scale_3_t2 d.Land I.Vil_id##I.tindex, cluster( VDSA_HH_id )
predict double dIV_3hat
label variable dIV_3hat "Quartile 3 FD predicted value for scaled term"

regress d.scale_4 scale_4_t1 scale_4_t2 d.Land I.Vil_id##I.tindex, cluster( VDSA_HH_id )
predict double dIV_4hat
label variable dIV_4hat "Quartile 4 FD predicted value for scaled term"

*generate FDIV interactions
gen dIV_1_P6=dIV_1hat*SD_pre6 if Inc_quart==1
replace dIV_1_P6=0 if Inc_quart!=1
label variable dIV_1_P6 "Quartile 1 FD IV of Scaled Term"

gen dIV_2_P6=dIV_2hat*SD_pre6 if Inc_quart==2
replace dIV_2_P6=0 if Inc_quart!=2
label variable dIV_2_P6 "Quartile 2 FD IV of Scaled Term"

gen dIV_3_P6=dIV_3hat*SD_pre6 if Inc_quart==3
replace dIV_3_P6=0 if Inc_quart!=3
label variable dIV_3_P6 "Quartile 3 FD IV of Scaled Term"

gen dIV_4_P6=dIV_4hat*SD_pre6 if Inc_quart==4
replace dIV_4_P6=0 if Inc_quart!=4
label variable dIV_4_P6 "Quartile 4 FD IV of Scaled Term"

order IVhat dIV_1hat dIV_2hat dIV_3hat dIV_4hat dIV_P6 dIV_1_P6 dIV_2_P6 dIV_3_P6 dIV_4_P6, before(X_Vil_id_102)



****FDIV Regression, Column 4****************************************

ivregress gmm d.LnC d.Land X_Vil_id_102-X_VilXtin_112_32 (d.s_1_P6_SD d.s_2_P6_SD d.s_3_P6_SD d.s_4_P6_SD = dIV_1_P6 dIV_2_P6 dIV_3_P6 dIV_4_P6), wmatrix(cluster VDSA_HH_id )