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From |
Mauro Mastrogiacomo <M.Mastrogiacomo@cpb.nl> |

To |
"'statalist@hsphsun2.harvard.edu'" <statalist@hsphsun2.harvard.edu> |

Subject |
RE: st: Year Fixed Effect Interpretation |

Date |
Fri, 9 Sep 2011 15:52:55 +0200 |

Vinod, Why would you drop to time dummies? According to the dummy variables approach, dropping one is enough. Anyway I suppose that the answer to this question is that it will change reference case, and therefore the (interpretation of) the coefficients. If you drop the first two years and you then get a sequence of increasing positive coefficients for the remaining dummies, you might interpret it is as an increasing time trend relative to the fist two years. If you drop the last two years, then the remaining time dummies-coefficients will possibly change to negative, because the time trend is increasing and the reference case is the last two years (the highest point of the time trend in my example). If you drop two consecutive years in the middle, the pattern would be a combination of the two possibilities above. If you drop two random year dummies, then it gets very difficult to give a sensible interpretation to my eyes, as you would interpret each coefficient as being relative to a reference case that is a combination of two randomly chosen variables. Of course you may still claim that you accounted for time effects, though in a very unusual way. Mauro -----Original Message----- From: owner-statalist@hsphsun2.harvard.edu [mailto:owner-statalist@hsphsun2.harvard.edu] On Behalf Of Venkiteshwaran, Vinod Sent: vrijdag 9 september 2011 15:30 To: statalist@hsphsun2.harvard.edu Subject: Re: st: Year Fixed Effect Interpretation Maarten/Mauro/Austin Thank you for your inputs. In the absence of a new variable that is collinear with the year dummies, what is effect of dropping two dummies, one on either end of the sample, as opposed to dropping two at the beginning or the end? Vinod * * 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/ -- ================================================================================ Dit bericht kan informatie bevatten die niet voor u is bestemd. Indien u niet de geadresseerde bent of dit bericht abusievelijk aan u is toegezonden, wordt u verzocht dat aan de afzender te melden en het bericht te verwijderen. De Staat aanvaardt geen aansprakelijkheid voor schade, van welke aard ook, die verband houdt met risico's verbonden aan het elektronisch verzenden van berichten. This message may contain information that is not intended for you. If you are not the addressee or if this message was sent to you by mistake, you are requested to inform the sender and delete the message. The State accepts no liability for damage of any kind resulting from the risks inherent in the electronic transmission of messages. ================================================================================ * * 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/

**References**:**Re: st: Year Fixed Effect Interpretation***From:*"Venkiteshwaran, Vinod" <Vinod.Venkiteshwaran@tamucc.edu>

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