calculate_errors_virtual_groups {RCTS}

Helpfunction for update_g(). Calculates the errors for one of the possible groups time series can be placed in.

Description

During the updating of group membership, the errorterm is used as the objective function to estimate the group.

Usage

calculate_errors_virtual_groups(
  group,
  LF,
  virtual_grouped_factor_structure,
  NN,
  TT,
  k,
  kg,
  vars_est,
  method_estimate_beta,
  Y,
  X,
  beta_est,
  g
)

Arguments

group

group

LF

NxT-matrix of the common factorstructure

virtual_grouped_factor_structure

list with length the number of groups; every element of the list contains NxT-matrix

NN

number of time series

TT

length of time series

k

number of common factors to be estimated

kg

number of group specific factors to be estimated

vars_est

number of variables that will be included in the algorithm and have their coefficient estimated. This is usually equal to the number of observable variables.

method_estimate_beta

defines how beta is estimated. Default case is an estimated beta for each individual. Default value is "individual." Possible values are "homogeneous", "group" or "individual".

Y

Y: NxT dataframe with the panel data of interest

X

dataframe with the observed variables

beta_est

estimated values of beta

g

Vector with estimated group membership for all individuals

Value

NxT matrix with the errorterms (=Y minus the estimated factorstructure(s) and minus X*beta)