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Re: st: Categorical variable

From   Richard Williams <[email protected]>
To   [email protected]
Subject   Re: st: Categorical variable
Date   Fri, 22 Jul 2005 07:54:07 -0500

At 08:34 AM 7/22/2005 -0400, ALICE DOBSON wrote:
Dear All,
I use stata 9 and have a very simple question.

I have a categorical independent variable [Level of Investment] in an unbalanced panel of firms. All firms fall within the three categories: Low, Medium, and High investments. I code them as 1 or 0 for each category, which are exclusive. If a firm has low level of investment then it canot have medium or high.

My question is how do I explain to Stata that this is a categorical variable and which of the three should be the base dummy?
Lots of ways.

* Use the -xi- command

* (My favorite) Create dummies and exclude the one you want as the base, e.g.

tab1 var, gen(dummy_)

* Some commands, such as -anova-, include options to specify which vars are categorical or continuous.

Richard Williams, Notre Dame Dept of Sociology
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