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Re: st: Xtreg is dropping dummy variable for OECD countries.


From   brijkers@worldbank.org
To   statalist@hsphsun2.harvard.edu
Subject   Re: st: Xtreg is dropping dummy variable for OECD countries.
Date   Mon, 14 Aug 2006 18:43:53 -0400

Dear Steffen,

As you are using a fixed-effects model, identification occurs on the basis of
time-varying characteristics only. Since dummies do not change over time, Stata
drops them (remember that fixed-effects are essentially transforming all
variables into deviations from their average and that the impact of observable
characteristics that are fixed such as gender and location cannot be estimated).

Hope this helps,

Best,

Bob
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