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Re: st: Binary Variables

From   Natalie Trapp <>
Subject   Re: st: Binary Variables
Date   Wed, 02 Jun 2010 18:41:51 +0200

Thank you very much to all of you for helping me!!

Well, I will try explain the problem again:
First I generated the dummy variables:

.sort region
.encode region, generate (REGION)

. *SchleswigHolstein
. generate SchleswigHolstein= REGION if REGION == 1
(43657 missing values generated)
. replace SchleswigHolstein=0 if SchleswigHolstein== .
(43657 real changes made)

. *Saarland
. generate Saarland= REGION if REGION == 2
(43918 missing values generated)
. replace Saarland=1 if Saarland== 2
(119 real changes made)

Then, I regressed the models:

. reg fertilisers_Var Saarland Brandenburg MeckPomm Sachsen SachsenAnhalt Thueringen IleDeFrance Champagne Picardie HauteNormandie Centre BasseNormandie Bourgogne NordPasDeCalais LorraineAlsace FrancheComte PaysDeLaLoire Bretagne PoitouCharentes Aquitaine MidiPyrenees Limousin RhonesAlpes Auvergne LanguedocRoussillon ProvenceAlpesCote Corse ValleDAoste Piemonte Lombardia Trentino AltoAdige Veneto FriuliVenezia Liguria EmiliaRomagna Toscana Marche Umbria Lazio Abruzzo Niedersachsen Molise Campania Calabria Puglia Basilicata Sicilia Sardegna Belgium Vlaanderen Wallonie Luxembourg Netherlands Denmark Ireland EnglandNorth EnglandEast EnglandWest Wales Scotland NorthernIreland MakedoniaThraki IpirosPeoponissos Thessalia StereaEllas NRW Galicia Asturias Cantabria PaisVasco Navarra LaRioja Aragon Cataluna Baleares CastillaLeon Madrid CastillaLaMancha Valencia Murcia Extremadura Andalucia Canarias Hessen EntreDouroEMinho TrasOsMontes RibatejoEOeste AlentejoEDoAlgarve Acores Austria EtelaSuomi SisaSuomi PohjanmaaRheinlandPfalz PohjoisSuomi Slattbygdslan SkogsOchMellan LanINorra Czech Estonia KoezepMagyarorszag KoezepDunantul NyugatDunantul DelDunantul EszakMagyarorszag EszakAlfoeld DelAlfoeld Latvia Lithuiana PomorzeAndMazury WielkopolskaAndSlask MazowszeAndPodlasie BadenWuerttemberg MalopolskaAndPogorze Slovakia Slovenia Bayern ClimateVariables Oats Barley Rye Wine *(and many more Crops and Variables)*

@ Steve: The omitted regions do change, when I change the independent variables. And I do have the same problem with some other binary variables like farmsizes and farmtypes.

There are no missing data for the regions and I can most certainly say that each farm in this dataset has a different value for the fertiliser input because it's measured in €.

I also thought the regions cannot be similar, because they have different temperatures, soil qualities, precipitation rates and so on. Therefore the South of France must be different from the North of Germany.

I also couldn't sort out how to make the "xtreg" command work. It gives me the error "not sorted r(5);", even when I sorted the data and then typed the "xtreg" command (maybe because there are too many variables or maybe because I have cross sectional data?!).

Thank you very much once again for your patience and kind assistance,

On 6/2/2010 4:14 PM, Neil Shephard wrote:
On Wed, Jun 2, 2010 at 2:03 PM, Natalie Trapp<>  wrote:
Hi Neil,

I use Stata 11 and do a normal OLS estimation (with the "reg" command):

y = dependent variable (agricultural inputs)
x = independent variables (climate variables, crops, etc.) and dummy
variables that represent the 150 regions within the EU

This is _not_ showing what you are typing, if you are using -regress-
then I would expect you to have included something along the lines

regress agricultural_inputs temperature crops i.region

The coefficients of the dependent variable within each region are very
divers and significant for about 120 regions.

My Problem is for instance, when "Schleswig Holstein" is my reference
group, Stata adittionally omits Valle d'Aoste, Vlaanderen and Ile de France.
Could it be that there is missing data within your data structure such
that most observations for these regions are omitted and the few that
remain all have the same value of "agricultural_inputs".

Still, I don't quite understand why Stata does it, because the regions
(Germany, France, Netherlands) do not seem to be similar to me.
"Seems" is a vague term and is based on your subjective interpretation
of what you are expecting, and it need not be because you have the
data, you can look at it.  Check the patterns of missing data that
exist and how these pan out within the regions, in particular those
that are being omitted.

Stata will be omitting them for a reason (and it will often indicate
why a particular category has been dropped).

So again, pasting the _exact_ command you are entering and the
resulting output would be very informative to other list members.  You
can copy and paste from the Results window directly into an email.


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