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RE: st: Xtreg is dropping dummy variable for OECD countries.
Thanks for the quick reply.
If I understand you correctly, you are saying I cannot get
a statement on group specific characteristics, e.g.
conditional convergence from panel data?
Or I would need to split my data in two files (say non-oecd
and oecd) and compare the coefficients by hand. Would that
> -----Original Message-----
> From: email@example.com
> [mailto:firstname.lastname@example.org] On Behalf Of
> Sent: Tuesday, August 15, 2006 12:44 AM
> To: email@example.com
> Subject: Re: st: Xtreg is dropping dummy variable for OECD countries.
> 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,
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