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Re: st: Fixed effects and time dummy variables


From   "Daniel Ayalew" <danielayalew@hotmail.com>
To   statalist@hsphsun2.harvard.edu
Subject   Re: st: Fixed effects and time dummy variables
Date   Tue, 10 Jun 2003 22:53:50 +0000

Dear Liliana,

if your model is a two period panel then you need to drop one of the time dummies; otherwise there will be a problem of perfect multicollinearity...



 

>From: Liliana Ramirez
>Reply-To: statalist@hsphsun2.harvard.edu
>To: statalist@hsphsun2.harvard.edu
>Subject: st: Fixed effects and time dummy variables
>Date: Mon, 9 Jun 2003 18:17:43 -0400 (EDT)
>
>Dear statalist,
>
>I am trying to perform regressions using xtreg command and fe.
>But when I am trying to control for time effects using dummy variables
>stata drops them inmediately. I have the same problem when controlling for
>geography.
>
>my regression looks like the following:
>
>xtreg loggdpp disteq openk ki kg unempl yr_1970 yr1980, fe
>
>Thanks for your help.
>
>Liliana
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