These ‘raw’ rates are averages across recipients and non-recipients, respectively, and do not take account of differences in characteristics between these groups. The magnitude of genuine state dependence in contrast is defined to be the difference between (i) the SA persistence rate were all individuals to have received SA last year, and (ii) the SA entry rate were all individuals not to have received SA last year. To arrive at this difference, persistence and entry probabilities are predicted for each individual using the estimated model and then averaged across all individuals.