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From |
sara borelli <saraborelli77@yahoo.it> |

To |
statalist@hsphsun2.harvard.edu |

Subject |
Re: st: state trends |

Date |
Tue, 19 Oct 2010 15:54:34 +0100 (BST) |

Hi Maarten, thank you very much for your reply I understood the reply to my first question. Just a clarification; Is that correct to say that in any case the coefficient of my variables of interest will always be the same regardless of whether I use year=1990,1991 or its scaled counterpart? Just the coefficient on state fixed effects change and the units in which the trend is measured should not matter...is that correct? I am not sure I understand the reply to the second question (quadratic trend). If the quadratic trend based on orginal year variable causes a drop in state fixed effects why it does not happen the same when I use the quadratic trend based on the re-scaled variable? Would be correct at this point to use the quadratic trend based only on the re-scaled year variable? thanks a lot for any further calrification sara --- Mar 19/10/10, Maarten buis <maartenbuis@yahoo.co.uk> ha scritto: > Da: Maarten buis <maartenbuis@yahoo.co.uk> > Oggetto: Re: st: state trends > A: statalist@hsphsun2.harvard.edu > Data: Martedì 19 ottobre 2010, 09:23 > --- 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/ > * * 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:*Maarten buis <maartenbuis@yahoo.co.uk>

**References**:**Re: st: state trends***From:*Maarten buis <maartenbuis@yahoo.co.uk>

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