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Re: st: re: WLS and dummies


From   Javier Bacarreza <superpiti@yahoo.com>
To   statalist@hsphsun2.harvard.edu
Subject   Re: st: re: WLS and dummies
Date   Sun, 17 Apr 2005 15:40:08 -0700 (PDT)

Thanks for the answer Kit and all, I tried to use the
command lincom in the following way:

The data set is (a sample): 

var1	var2	var3	var4	var5	var6	var7
.576	1	0	0	1	0	0
.354	0	0	1	0	1	0
.542	1	0	0	0	0	1
.6354	0	1	0	1	0	0
.875	1	0	0	0	1	0
.524	0	1	0	0	0	1
.324	0	0	1	0	1	0
.643	1	0	0	1	0	0
.523	0	1	0	0	0	1
.089	0	0	1	0	1	0

and I regress :

reg   var1 var2 var3 var4 var5 var6 var7

and it drops var4 and var7 due multicollinearity. And
I use lincom:

lincom var4 

But still I can not get the estimation of this
parameter and the std error since it says dropped. Do
you have any clue how can I solve this?..

Thanks in advance,

Javier


--- Kit Baum <baum@bc.edu> wrote:
> Javier wrote
> 
> I would like to ask a question that I had before but
> I
> couldnt solve. The problem I have is the following:
> Im
> aplliying shif-share method in a regression of data
> panel. My dependent variable is the growth in
> employment and I have as independent variables
> dummies
> for industries, dummies for years and for regions.
> The
> problem arises because I loose one region, one year
> and one industrie because of the dummies use. I dont
> want to loose this since they are useful for the
> analysis I'm doing. Does anyone have an idea how to
> do
> this?.
> 
> You can always include ONE complete (mutually
> exclusive and exhaustive) 
> set of dummies in a regression by excluding the
> constant term. You gain 
> nothing by doing so; the coefficients are just
> measured vs. zero rather 
> than vs. the excluded class. But you cannot include
> TWO or more 
> complete sets of dummies in a regression,
> irregardless of the treatment 
> of the constant term, since each set of dummies sums
> to an iota vector 
> of length N, and you can't have two of those in your
> regression. But 
> then you don't need to; you can always calculate all
> the coefficients, 
> in point and interval form, from the (G-1) dummies'
> coefficients. The 
> lincom command is useful here.
> 
> Kit Baum, Boston College Economics
> http://ideas.repec.org/e/pba1.html
> 
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> 


		
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