st: Re: Re: Dummy Variable Trap

["Michael Blasnik" <michael.blasnik@verizon.net>]

My prior post was just plain wrong...if the dummy variable set span the full 
range of time periods then they will always sum to 1 and one variable will 
be dropped, whether or not the panels are balanced.  I once encountered this 
problem when running a do file on an updated dataset where the dummy 
variables were manually generated and a new category had been introduced.  I 
would double check whether somethng like this happened to your data.

Michael Blasnik
michael.blasnik@verizon.net

----- Original Message ----- 
From: "Michael Blasnik" <michael.blasnik@verizon.net>
To: <statalist@hsphsun2.harvard.edu>
Sent: Wednesday, June 08, 2005 9:00 AM
Subject: st: Re: Dummy Variable Trap



> 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
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