st: Re: Fixed effect analysis question

["R.E. De Hoyos" <redeho@hotmail.com>]

Nasreen,

The panel data fixed effects estimator will make use of all the observations 
including those for which the indicator independent variable has no 
within-group variation. Notice that the within covariance between the 
constant independent variable and the dependent one will be zero.

Non-linear fixed effects will drop groups with no within variation in the 
dependent variable. I am sure you will find the following reference useful 
(Greene, 2001):

http://ideas.repec.org/p/ste/nystbu/01-01.html

Rafa
________________________
Rafael E. De Hoyos
Faculty of Economics
University of Cambridge
CB3 9DE, UK
www.econ.cam.ac.uk/phd/red29/

----- Original Message ----- 
From: "Khan, Nasreen" <nkhan12@uic.edu>
To: <statalist@hsphsun2.harvard.edu>
Sent: Monday, April 10, 2006 2:07 AM
Subject: st: Fixed effect analysis question



> I have a very  basic question. I am running an individual level fixed
> effect analysis. My independent variable of interest is a dummy variable
> (y/n). For some people there is variation in the independent variable
> where as some people do not have any variation. My question is for people
> who do NOT have any variation in the independent variable do they
> contribute to the coefficient or are they dropped out.
>
> Thanks
>
> Nasreen
>
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