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st: areg question

From   Sue <>
Subject   st: areg question
Date   Fri, 24 Apr 2009 12:49:57 -0400

Dear all,

I'm running the following regression:

areg infant_mort *rain* urban country ethn_rc, absorb(mother_rc)

where urban, country and ethn_rc are variables that don't vary within
mother_rc (the FE category).

My questions are:

1) since urban, country and ethn_rc don't vary within mother_rc, they
should all get dropped. However, ethn_rc gets estimated. What is odd
is that when I generate
bys mother_rc: egen ddd = mean(ethn_rc)
gen diff = ethn_rc - ddd

diff has only values of zero and it still gets estimated with fixed
effects. Again, ethn_rc is constant within mother_rc.

2) there are 4 variables in rain: long_rain1, long_rain2, long_rain3
and long_rain4.

long_rain 1 and long_rain3 are highly correlated and long_rain2 and
long_rain4 are highly correlated(0.88). My understanding was that it
shouldn't get dropped unless they are perfectly correlated. However
one variable gets dropped(long_rain4). I looked at the raw data but
the numbers are not identical. The values are very small in the range
of 0.0xxx - 0.00xxx. Could this be causing the problem?

I would really appreciate any input.

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