Stata The Stata listserver
[Date Prev][Date Next][Thread Prev][Thread Next][Date index][Thread index]

st: Re: Dummy Variable Trap


From   "Michael Blasnik" <michael.blasnik@verizon.net>
To   <statalist@hsphsun2.harvard.edu>
Subject   st: Re: Dummy Variable Trap
Date   Wed, 08 Jun 2005 09:00:30 -0400

If your panels are unbalanced, then xtreg may not need to drop any of the time dummies because they will not always sum to 1 and so will not be perfectly collinear.

Michael Blasnik
michael.blasnik@verizon.net

----- Original Message ----- From: "Cordula Stolberg" <c.stolberg@gmx.com>
To: <statalist@hsphsun2.harvard.edu>
Sent: Tuesday, June 07, 2005 9:25 AM
Subject: st: Dummy Variable Trap



Hello All,

I have a panel regression, which I first run as a random effects regression
and then as pooled OLS. I have yearly observations and add a time dummy for
each year (the time dummies are also used for an interaction term with
another independent variable). I know that to avoid the dummy variable trap,
I should drop one of the dummies. I also know that Stata otherwise drops one
of the time dummies. Now I have estimated the random effects regression and
the pooled OLS regression and kept (by mistake) all of the time dummies.
However, instead of dropping one of the dummies, Stata kept all and
delivered results. What am I missing here?

Thanks,
Cordula
*
*   For searches and help try:
*   http://www.stata.com/support/faqs/res/findit.html
*   http://www.stata.com/support/statalist/faq
*   http://www.ats.ucla.edu/stat/stata/



© Copyright 1996–2014 StataCorp LP   |   Terms of use   |   Privacy   |   Contact us   |   What's new   |   Site index