Maarten -
Thanks for your reply. Are you sure that I cannot use log_population?
I may have been unclear in my description.
I should have emphasized that my log_population is constant for each
state and refers only to the log_population before my study. Hence
it's really log_population_1940. Also, I'm then interacting it with
grade-year combinations so that for example, I estimate a coefficient
that describes the effect of log_population in 1940 on say, 6th
graders in 1952. I think I am still identified if I have that
interaction term.
Best,
Dana
On Thu, Sep 17, 2009 at 8:56 AM, Maarten buis <[email protected]> wrote:
> --- On Thu, 17/9/09, Dana Chandler wrote:
>> I'm running a large fixed effects model where each
>> observation is a test score for every grade level, year,
>> and state. My outcome variable is a test score and the
>> focal independent variable is the % of HH in state that
>> have cable television. The only other variable I have is
>> log_population for the first year of my study at the state
>> level which I also want to interact with each combination
>> of grade-year.
>
> Are your fixed effects States? In that case you can't use
> your log_population variable, as that is constant within
> states. The whole point of fixed effects, as that you
> control for all variation (observed and unbserved) that
> remains constant within a state. The price you pay is
> that you cannot study what these constant variables do.
> You can do so, if you are willing to do a random effects
> model. But now you have to assume that the remaining
> unobserved state level variables are uncorrelated with
> any of the observed variables. There is a huge difference
> between disciplines in the willingness to accept this
> assumption.
>
> hope this helps,
> Maarten
>
> --------------------------
> Maarten L. Buis
> Institut fuer Soziologie
> Universitaet Tuebingen
> Wilhelmstrasse 36
> 72074 Tuebingen
> Germany
>
> http://www.maartenbuis.nl
> --------------------------
>
>
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