How to Define a Panel Dataset in Stata: 'tsset' Command Explained

To define a panel dataset of the variable 'city' over 'year' in Stata, you would use the following command:

tsset year city

This command tells Stata that your data is a panel dataset, with 'year' as the time variable and 'city' as the cross-sectional variable. Here's why this is the correct answer:

• 'tsset' command: This command is specifically designed to define panel datasets in Stata.
• 'year city': The order is important. The time variable ('year') must come first, followed by the cross-sectional variable ('city').

Incorrect options:

• 'xsset year city': There's no command named 'xsset' in Stata.
• 'tsset year': This would define a time series dataset, but not a panel dataset with the 'city' variable.
• 'tsset city': This would define a cross-sectional dataset, not a panel dataset.
• 'none of the above': The correct answer is a. tsset year city.