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Re: st: fixed-effects with dummy variables


From   bdeaton@uoguelph.ca
To   statalist@hsphsun2.harvard.edu
Subject   Re: st: fixed-effects with dummy variables
Date   Sun, 04 May 2008 14:43:22 -0400

David,

Thanks very much for your reply; it was very helpful.

Brady Deaton


Quoting David Greenberg <dg4@nyu.edu>:

A dummy variable in your situation has the same interpretation as in other regression contexts. It raises or lowers the intercept by the amount of its coefficient when the dummy variable takes on the value 1. When its value is zero it has no effect. David Greenberg, Sociology Department, New York University

----- Original Message -----
From: bdeaton@uoguelph.ca
Date: Thursday, May 1, 2008 5:23 pm
Subject: st: fixed-effects with dummy variables
To: statalist@hsphsun2.harvard.edu



Hello,

I have included dummy variables in a county-level fixed-effects regression.

Stata will estimate the coefficients for these dummy variables because

they vary across time (as well as counties) in the sample.

Given the transformation of data in a fixed-effects regression, I am

uncertain as to how I should interpret the coefficients for these
dummy variables.

Id greatly appreciate any thoughts/comments/ or suggested readings.

A simplified version of the county-level fixed effects regression I am

running in stata is reflected by the following stata command:

xtreg  y d1 d2 d3  X t, fe

where:

y is a continuous variable
d1..d3 represent time varying dummy variables with the omitted dummy

being (d4).
X represents a vector of time varying continuous explanatory variables.
t represents a vector of time dummy variables.


Thanks,

Brady Deaton
Food, Agricultural and Resource Economics
University of Guelph

P.S.  I posted a version of this question earlier in the week
(received no responses). I believe, however, this current email better

reflects my question and the range of advice that would be welcomed.





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