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Re: st: fixed effects regression with indicator variables
On torsdag, okt 31, 2002, at 01:20 America/Montreal, Sangho Kim wrote:
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).
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
also included. Thank you very much for your effort in advance.
A simple way is to
. egen new_group = group(classification_1 classification_2 .... )
. 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 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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