I have an unbalanced panel (for most firms, I have two or more years of data, and for some firms only one year).
I want to know what stata does to observations (firms) with only one year of data when I run a fixed effects model with either the xtreg, fe(firm_id) or areg, absorb (firm_id) command. It seems like the correct thing to do is to drop observations with only one year of data, but I am getting different results when I explicitly exclude firms with only one-year of data and when I use Stata's fixed effects commands. This suggests that Stata is using data on firms without time-variation in a way that I don't understand...
Thank you much.
--- Deepak
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