<p>The number of observation changes likely because there are missing observations for some controls. Unless you suspect that statistics might systematically not collect data for some firms (e.g. maybe data on some control was recorded only for big firms) this is not concerning. You could consider investigating if there are any systematic reasons for missing data.</p>
<p>Additionally you should also be concerned if too many observations are dropped if you have small sample as parametric models require certain quantity of observations so you can reasonably justly their asymptotic properties. For standard regression a typically a sufficient sample size to justify its asymptotic properties is 30 observations per independent regressors (see Verbeek A Guide to Modern Econometrics pp 36). However, in your case you have more than 300k observations even in the most general model so this is not an issue.</p>

CC BY-SA 4.0
2021-06-30T09:03:50.427Z
@BeautifulMindset depends on reasons you exclude them financial services are routinely excluded on purpose from many papers because they behave differently from rest of the economy
1muflon1
CC BY-SA 4.0
2021-06-30T10:32:25.353Z
I understand, 1muflon1, I mean, if I exclude financial services based on this reason, whether I need to concern the part "**Unless you suspect that statistics might systematically not collect data for some firms**" ? Thank you
Phil Nguyen
CC BY-SA 4.0
2021-06-30T14:46:12.523Z
@BeautifulMindset I am not sure if I understand the comment, if you on purpose exclude something then of course it is not of concern but then that also means that results are not applicable to the category you excluded. That is its completely fine to exclude financial system from your research, but then you cannot claim that the results you find can say anything about financial system at all, if you are fine with that then you can exclude to your hearts desire. You could also exclude all retail but then the results do not apply there etc.
1muflon1
CC BY-SA 4.0
2021-06-30T20:48:54.153Z
awesome, it is exactly what I want to ask
Phil Nguyen
CC BY-SA 4.0
2021-06-30T04:05:37.257Z
Thanks  1muflon1, regarding "*Unless you suspect that statistics might systematically not collect data for some firms (e.g. maybe data on some control was recorded only for big firms) this is not concerning*", **what if I exclude some financial services and utility firsm as extant literature**, whether I need to concern about that point?
Phil Nguyen
CC BY-SA 4.0
2021-06-30T01:20:01.550Z
2021-06-30T01:20:01.550Z
1muflon1
<p>I am running an international regression, the number of observations and adjusted R-squared is as below</p>
<p><a href="https://i.sstatic.net/LopLQ.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/LopLQ.png" alt="enter image description here" /></a></p>
<p>In Column 1, we only consider the effect of a leniency law without any additional controls, and, in Column 2, we add firm-specific variables and several other variables to capture macroeconomic conditions, in Column 3, we add some industry-level variables, In Column 4, I excluded the industry-level variable and add industry * year fixed effects, In column 5, I added region * year
fixed effect. And In the last column, I exclude US out of my sample.</p>
<p>I follow <a href="https://onlinelibrary.wiley.com/doi/epdf/10.1111/1756-2171.12299" rel="nofollow noreferrer">Dong, 2019</a> and his result is like below, and he did not concern the number of observations</p>
<p><a href="https://i.sstatic.net/ROBdt.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/ROBdt.png" alt="enter image description here" /></a></p>
<p>I am wondering if I should concern the change in the number of observations and normally when we should concern the change in the number of observations?</p>

<paneldata>
When I should concern if the number of observation varies quite a bit?
Phil Nguyen
# When I should concern if the number of observation varies quite a bit?

(Asked by: username_0 on 2021-06-30)

I am running an international regression, the number of observations and adjusted R-squared is as below

[![enter image description here](https://i.sstatic.net/LopLQ.png)](https://i.sstatic.net/LopLQ.png)

In Column 1, we only consider the effect of a leniency law without any additional controls, and, in Column 2, we add firm-specific variables and several other variables to capture macroeconomic conditions, in Column 3, we add some industry-level variables, In Column 4, I excluded the industry-level variable and add industry \* year fixed effects, In column 5, I added region \* year
fixed effect. And In the last column, I exclude US out of my sample.

I follow [Dong, 2019](https://onlinelibrary.wiley.com/doi/epdf/10.1111/1756-2171.12299) and his result is like below, and he did not concern the number of observations

[![enter image description here](https://i.sstatic.net/ROBdt.png)](https://i.sstatic.net/ROBdt.png)

I am wondering if I should concern the change in the number of observations and normally when we should concern the change in the number of observations?

**Tags:** paneldata

---

## 1 answers

### Answer by username_1 on 2021-06-30. Score: 2 | Accepted answer

The number of observation changes likely because there are missing observations for some controls. Unless you suspect that statistics might systematically not collect data for some firms (e.g. maybe data on some control was recorded only for big firms) this is not concerning. You could consider investigating if there are any systematic reasons for missing data.

Additionally you should also be concerned if too many observations are dropped if you have small sample as parametric models require certain quantity of observations so you can reasonably justly their asymptotic properties. For standard regression a typically a sufficient sample size to justify its asymptotic properties is 30 observations per independent regressors (see Verbeek A Guide to Modern Econometrics pp 36). However, in your case you have more than 300k observations even in the most general model so this is not an issue.

> **Comments:**
> **username_0**: Thanks  1muflon1, regarding "*Unless you suspect that statistics might systematically not collect data for some firms (e.g. maybe data on some control was recorded only for big firms) this is not concerning*", **what if I exclude some financial services and utility firsm as extant literature**, whether I need to concern about that point?  
> **username_1**: @BeautifulMindset depends on reasons you exclude them financial services are routinely excluded on purpose from many papers because they behave differently from rest of the economy  
> **username_0**: I understand, 1muflon1, I mean, if I exclude financial services based on this reason, whether I need to concern the part "**Unless you suspect that statistics might systematically not collect data for some firms**" ? Thank you  
> **username_1**: @BeautifulMindset I am not sure if I understand the comment, if you on purpose exclude something then of course it is not of concern but then that also means that results are not applicable to the category you excluded. That is its completely fine to exclude financial system from your research, but then you cannot claim that the results you find can say anything about financial system at all, if you are fine with that then you can exclude to your hearts desire. You could also exclude all retail but then the results do not apply there etc.  
> **username_0**: awesome, it is exactly what I want to ask  

---

