I looked at many posts on similar issue but didn't find a solution for my case.
I have balanced panel data for the CBSAs in the US from 2005-2015, when I ran fixed effects model with the following command, I get reasonable results and the panel is shown to be balanced.
plm(formula = fm, data = pCBSA_balanced, effect = "twoway", model = "within")
Balanced Panel: n = 938, T = 11, N = 10318
(actual results omitted...)
However, when I proceed to run the same model with spatial lag using the following command and its variations,
spml(formula = fm, data = pCBSA_balanced, listw = newCBSA_nb.lw, model = "within", effect="twoways", lag=TRUE,zero.policy=T,na.action = na.pass))
I get the following error...
Error in if (!balanced) stop("Estimation method unavailable for unbalanced panels") : missing value where TRUE/FALSE needed
I made sure there are no missing values in my panel data, ordered the panel to have id variable CBSAFP and year as my first and second variables, then sorted by year as suggested by other posts in similar situations, but the error persisted :(
I suspect the error might has something to do with 42 non-neighboring CBSAs in the weighting matrix. This is how I defined my listw, with the zero.policy option.
newCBSA_nb <- poly2nb(CBSA4p, queen = TRUE, row.names = CBSA4p$CBSAFP)
newCBSA_nb.lw <- nb2listw(newCBSA_nb, style="W", zero.policy=T)
I'm not willing to just get rid of the non-neighboring CBSAs for my analysis, does anyone have any suggestions on what I should do next?