st: How to interpret time dummies in simple difference in difference regression

[Melisa Haytasingh <prettymelisa@gmail.com>]

Hi guys,

I'm doing a regression to analyse the difference between resource-rich
Trinidad & Tobago and their resource-poor Caribbean neighbour,
Barbados. I am treating resources (oil and gas) as the endogenous
variable and regressed GDP on 5 variables: a time trend, dummy taking
1 for all observations for T&T before resources (before 1970), dummy
taking 1 after discovery of resources, dummy taking 1 for obs of
Barbados before 1970 and dummy taking 1 for obs of Barbados after
1970. The regression looks like this in Stata:

-          regression 1:

reg gdp_percapita time TnT_no_resources TnTresources
barbados_before1970 barbados_after1970, nocons

-          regression 2:

reg inlfation time TnT_no_resources TnTresources barbados_before1970
barbados_after1970, nocons


I am having trouble figuring out how to interpret the results. I think
I need to find the difference between the coefficients like this:
 (barbados_before1970 - TnT_no_resources) and (barbados_after1970 -
TnTresources) and then compare those figures with each other. But I am
not sure. Also, I am not sure about how to interpret the coefficient
itself on each of the dummies. I tried to look for similar regressions
online and I got a better overall understanding but still confused
about how to interpret. :(


Thank you very much for any help.


Sincerely,

Melisa
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