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Re: st: Does it need to control industry if the concerned variable has been adjusted by industry?

From   Maarten buis <>
Subject   Re: st: Does it need to control industry if the concerned variable has been adjusted by industry?
Date   Tue, 16 Mar 2010 01:00:33 -0700 (PDT)

--- On Tue, 16/3/10, wrote:
> One variable is characteristic of industry, so I adjust it
> with the median or mean value of industry.
> Then does it need to control industry as regressors if the
> concerned variable is a dependent variable or an independent
> variable?

First, it is not clear what you want to do here. For example,
what did you (want to) type in Stata? Imagine someone who 
wants to help, but knows nothing about your data, your model,
the substantive issue you want to adjust. However, that person
does know Stata. Imagine what kind of information that person 
would need to understand your question (and hopefully answer it).

Second, in statistics you don't _need_ to do anything. There
is no such things as statistical police. Statistics is used
as part of a logical argument that links a question, stuf 
you have seen (the data), to an answer. The basic line of 
that argument is: I have a question, I have looked around,
this is what I have seen, and it leads to the following 
answer. The statistics is just there to summarize the stuff
you have seen, so that it becomes easier to see what the 
answer to your original question is. If there is anything
that you need to do, than it is to just use common sense and
keep this basic line of your argument in the back of your
head when doing statistics.

Third, you cannot add characteristics of an industry _and_ 
industry dummies. The dummies would absorb all the information 
that is available at the industry level, so there is no 
information left to estimate the effects of industry 

Hope this helps,

Maarten L. Buis
Institut fuer Soziologie
Universitaet Tuebingen
Wilhelmstrasse 36
72074 Tuebingen


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