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From |
"Erik Ø. Sørensen" <sameos@mac.com> |

To |
statalist@hsphsun2.harvard.edu |

Subject |
Re: st: fixed effects regression with indicator variables |

Date |
Thu, 31 Oct 2002 08:03:55 -0500 |

On torsdag, okt 31, 2002, at 01:20 America/Montreal, Sangho Kim wrote:

Dear Statalister,I assume the problem is that there are a lot of dummy variables?

I am wondering if it's possible to use xtreg, fe regression for the

fixed-effects model with indicator variables. For the indicator

variables, I am using job classifications (worker1-worker10). Especially

I am wondering if I can use xtreg, fe regression in which ALL job dummy

variables (without omitting one of them) are used and a constant term is

also included. Thank you very much for your effort in advance.

A simple way is to

. egen new_group = group(classification_1 classification_2 .... )

and then

. xtreg y x, fe id(new_group)

xtreg imposes that the mean of the categorical new_group dummies are zero, so you get a constant term. If you care mostly about the coefficients on x, this is ok.

Erik

--

Erik Ø. Sørensen, <http://www.geocities.com/erik_oiolf/>.

phd student (economics), Norwegian School of Economics.

currently visiting Queen's University, Kingston Ontario.

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**References**:**st: fixed effects regression with indicator variables***From:*Sangho Kim <shkim@kwandong.ac.kr>

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