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st: Re: Re: fixed effects models

From   "Giorgio Ricchiuti" <[email protected]>
To   <[email protected]>
Subject   st: Re: Re: fixed effects models
Date   Mon, 20 Oct 2003 08:19:04 +0200

Giorgio wrote,

> > 1) I've tried to use xtregar,fe but I had a problem: if I use
> > time-invariant
> > variables I receive this error message
> >         conformability error;
> >         You have issued a matrix command attempting to combine two
> >         matrices that are not conformable, for example, multiplying
> >         a 3x2 matrix by a 3x3 matrix.  You will also get this message
> >         if you attempt an operation that requires a square matrix and
> >         the matrix is not square.
> > When I do not use them I'm able to use xtregar,fe...unfortunately my
> > time-variant variable are really important. Where could the problem be?

Kit wrote

> Fixed effects models (with individual effects) cannot contain
> time-invariant variables; it is that simple. Random-effects models can
> contain time-invariant variables (but have their own set of issues).

Hy friends,

Kit thanks a lot for your help,
I know that FE cannot contain time-invariant variables (for which I could
achieve the coefficients retained the fixed values (u) and run an OLS of the
fixed values on the time invariant variables). However, the Stata help
suggested that as in the normal xtreg,fe
"any x_it that do not vary over t are collinear with the u_i and will be
dropped from the fixed-effects model".. just "dropped not that I'm not able
to run the regression...
that's the reason of question..
Thanks again

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