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From |
Maarten buis <maartenbuis@yahoo.co.uk> |

To |
statalist@hsphsun2.harvard.edu |

Subject |
Re: st: state trends |

Date |
Tue, 19 Oct 2010 08:23:39 +0100 (BST) |

--- On Mon, 18/10/10, sara borelli wrote: > I am running a model with state and year fixed effects and > I need to add state specific time trends. I created a dummy > for each state and interacted it with the variable year, > where year=1990,1991,1992,1993... > The trend variables created are: trendstate1 > trendstate2 ....trendstate51 > > I also re-scaled the year variable so that > yearnew =1 if year==1990; =2 if year==1991; =3 if > year==1992 and so on. The trend variables in this case are: > trendnewstate1...trendnewstate51 > > I then regressed: > xi: y x i.year i.state trendstate1-trendstate51 > and > xi: y x i.yearnew i.state trendnewstate1-trendnewstate51 > > the coefficient of my X variable of interest is the same in > both regressions but the coefficient on the state fixed > effects are very different. It must be due to the rescaling > of the year variable, but I am not sure why. In the top regression you get for each state the deviation from the reference state in the expected y if x = 0 in the year 0 (i.e. 2010 years ago). Which is probably a "not-so-mild" extrapolation. In the bottom regression you get the same, but now for 1989. > I then tried to add a quadratic time trend. That is I > interacted each state dummy with year2=year*year. > Then I run > xi: y x i.year i.state trendstate1-trendstate51 > > trendsquarestate1-trendsquarestate51 > but stata altogether drops the state fixed effects > > However, if I create yearnew2=yearnew*yearnew and > quadratic trends based on it and run > xi: y x i.year i.state > trendnewstate1-trendnewstate51 trendnewsquarestate1-trendnewsquarestate51 > > then stata does not drop the state fixed effects and > estimates differ I am not sure what is going on or what > I am doing wrong The devil is in the detail, it probably depends on exactly what variables are in the list trendstate1-trendstate51. In simular situations I usually work these things out for one state, and than start creating interactions. Actually, I usually start with trying to bypass that step, get into trouble, and than go back and work it out step by step. Hope this helps, Maarten -------------------------- Maarten L. Buis Institut fuer Soziologie Universitaet Tuebingen Wilhelmstrasse 36 72074 Tuebingen Germany http://www.maartenbuis.nl -------------------------- * * For searches and help try: * http://www.stata.com/help.cgi?search * http://www.stata.com/support/statalist/faq * http://www.ats.ucla.edu/stat/stata/

**Follow-Ups**:**Re: st: state trends***From:*sara borelli <saraborelli77@yahoo.it>

**References**:**st: state trends***From:*sara borelli <saraborelli77@yahoo.it>

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