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st: RE: Dropped Dummy Variables

From   Nick Cox <>
To   "''" <>
Subject   st: RE: Dropped Dummy Variables
Date   Wed, 6 Jun 2012 17:12:47 +0100

This isn't (obviously) a problem. Stata pointed out that what you offered as a model needs to be revised. 


Jason Hecht

I created a set of country and sector dummy variables using the Data\Create or
change data\  etc.  function.

Now the problem is that when I include, say, "USA" to denote a firm
located in the US, I get the following message:

note: USA dropped from div() because of collinearity
note: USA dropped because of collinearity

I am using the above dummy variables in an equation estimated with "xtabond."

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