Re: st: Panel data estimation with constant variables

[federico.tedeschi@univr.it]

Dear Sirak,
any time I've used year-fixed-effects, I've dropped variables changing only from year to year (but constant under any other respect) from analysis. This is also what I've seen in other papers.
Analogously, when fixed effects are for countries or geographical units, I believe variables changing only with respect to those units but constant under any other respect (including time) can't be included in the analysis. You can't estimate the fixed-effect and the effect of these variables at the same time.
I think a possible solution could be the use of random (rather than fixed) effect in the estimation. Otherwise (but it's just a guess of mine), you could see afterwards how country-variables are related to the country-fixed-effect.
However, I think the question is not related to the Stata software, but to the model you want to perform.
Federico 

> Dear stata users,
> I want to estimate a pannel data with a
> panel variable: country .
> time variable: year, 1990 to 1999
> delta: 1 unit
> I have some variables which are constant over all the years, eg.
> altitude, latitude and distance, and thus droped from the estimation.
> Does the fixed effects pannel data estimation allow contant variables.
> If not, what could be the solution?. I need help. Thanks in advance.
> Sirak
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