# [no subject]

```

> The main reason for the difference is that AREG counts the machine
> equivalent of the case dummies when it computes the R2; EXTREG, FE
> does not.  It follows that a lion's share of the variance you've
> explained is due to the case specific attributes you've included in
>
> Two incidental matters:  First, if you end up using XTREG, FE the
> proper R2 to report is the "within".  Second, R2 square values aren't
> the best measure of anything that matters although referees sometimes
> think they matter .  The point is I wouldn't spend much space in your
> write up on these values.
>
> Dave Jacobs
>
> At 12:22 PM 2/4/2008, you wrote:
> >Dear all,
> >
> >hi I write to ask you one question regarding the difference between
> >areg and xtreg, fe. In particular I would like to understand the
> >difference concerning the r squared. Indeed I use a fixed effects
> >model to estimate the returns to education on a panel of
> >individuals. I performed fixed effects estimates for two categories
> >of workers, blue collars (which are many) and white collars.
> >I found out interesting results. However, for blue collars the
> >estimates of the r-squared with xtreg,fe are the following:
> >r^2 within 0.07
> >r^2 between 0.002
> >r^2 overall 0.004
> >when I do the same estimation with areg, I obtain an r^2 of 0.80. a
> >huge difference.
> >
> >I would like to understand why is there a so big difference, and
> >which one I should report...
> >
> >Another related question concern the estimates for white collars.
> >The xtreg, fe have an overall r^2 of 0.27 (much better than the
> >previous one). However when I try the areg command it says that the
> >matrix is not positive definite (I use also some lagged values of my
> >variable of interests in the estimation).
> >
> >Could anyone help me?
> >many thanks
> >jenny
> >
> >
> >*
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>
>
> *
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>

*
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```