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Re: st: Binary Variables

From   Maarten buis <>
Subject   Re: st: Binary Variables
Date   Wed, 2 Jun 2010 04:16:13 -0700 (PDT)

--- On Wed, 2/6/10, Natalie Trapp wrote:
> I use a Dummy Variable for 150 regions within the EU27.
> When I regress the model, I use one region as a reference
> group, but Stata still automatically omits four to five more
> regions. Is it maybe because the regions are too similar in
> their characteristics so that I have to build groups of
> similar regions? Or is there another way how I can do the
> regression with all regions of interest?

This is a fixed effects regression (assuming you are using 
linear regression, -regress-).  This type of regression can 
only make use of variation within a region, so if the dependent
variable is constant within a region, the region will be dropped.
Your alternative is to use random effects regression (see:
-help xtreg-), but that has disadvantages of its own. It is up 
to you to decide which disadvantages you think are least bad... 

Hope this helps,

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


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