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Re: st: about dummy variables


From   Tae Hun Kim <thkim91@gmail.com>
To   statalist@hsphsun2.harvard.edu
Subject   Re: st: about dummy variables
Date   Thu, 17 Mar 2005 10:56:15 -0600

Yes, I know this question is not directly related to State program.
But I need someone's help to understand the problem.

The Ststa code to generate dummy variables is
**dummy variable
gen pre96=0; 
replace pre96=1 if year==1986 | year==1987 | year==1988 | year==1989 |
year==1990 | year==1991 | year==1992 | year==1993 | year==1994 |
year==1995;
gen  post96=0;
replace pos96=1 if year==1996 | year==1997 | year==1998 | year==1999 |
year==2000 | year==2001 | year==2002;

**interactive term
gen pre96s=pre96*smom;
gen post96s=post96*smom;

Thanks,
TaeHun Kim



On Thu, 17 Mar 2005 11:20:37 -0500, Daniel Lawson <k95dl01@gmail.com> wrote:
> This doesn't sound like a Stata-specific question.  You might get more
> or better responses to this question if you asked this question in
> another forum.
> 
> In terms of Stata code, how did you generate your dummy variable?
> 
> Daniel Lawson
> 
> On Mar 16, 2005, at 6:20 PM, Tae Hun Kim wrote:
> 
> > Hello.
> > I would be greatfull if someone helps me to understand dummy variables.
> >
> > For example,
> > Y= a+b*X+c*dum+d*(X*dum)+e
> > where Y : income,  X : education(years),  dum=dummy variable (dum=1 if
> > male, dum=0 if female)
> >
> > If I estimate this equation using OLS, recalulated coefficents are the
> > same regardless of whether dum=1 if male (0 otherwise) or  dum=1 if
> > female(0 otherwise).
> > i.e.  if I define a dummy variable as dum=1 if male, o otherwise
> >      male(1) : E(Y)= (a+c)+(b+d)X,  female(1) : E(Y)=a+bX
> >       if I define a dummy variable as dum=1 if female, o otherwise
> >      male(2) : E(Y)=a+bX,              female(2) : E(Y)= (a+c)+(b+d)X
> > =>the coefficients of male(1) and male(2) equation are the same.
> >
> > (Question)
> > 1. But when I estimate this equation using GMM or IV, the coefficients
> > of male(1) and male(2) equation are not the same. Why?
> > 2. If the coefficient are different, what is the criteria to define a
> > dummy variable(male=1 or female=1) ?
> >
> > Thanks in advance
> > TaeHun Kim
> > *
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> >
> 
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