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st: Re: xtreg vs areg, once again

From   Christopher F Baum <>
Subject   st: Re: xtreg vs areg, once again
Date   Fri, 4 Jun 2004 11:39:29 +0100

On Jun 4, 2004, at 7:33 AM, Andrea wrote:

Thanks for that. However, adding 420 dummies to my model would only work
when estimating a pooled OLS, but not a within estimator (since the fixed
effects model would drop anything that is invariant over time).
Any hints for doing that in fixed effects?
A one-way individual fixed effects model drops any variable that is constant for an individual, such as gender or race. As in previous post, it makes no difference algrebraically whether you estimate this model with the within transformation or by explicit dummy variables. The rank of X'X will be the same any way you do it. You cannot include time-invariant variables in an individual FE model.


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