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From |
jean-luc morin-chesnel <jeanluc.morinchesnel@gmail.com> |

To |
statalist@hsphsun2.harvard.edu |

Subject |
st: constant in -xtreg (yes, again!) |

Date |
Tue, 3 Dec 2013 21:48:18 +0100 |

Dear all, First, let me tell you that I have read http://www.stata.com/support/faqs/statistics/intercept-in-fixed-effects-model/ many, many times. Still I am puzzled and maybe you can help me. The faq states that " xtreg, fe reports have simply been reformulated so that the reported intercept is the average value of the fixed effects." However, I do not see where this result is shown on the page. It appears that Stata estimates the model yit - yi + y = a + (xit - xi + x)b + (eit - ei + v) + e under the constraint that v=0 (the sum of the fixed effects v_i) Could someone explain me why a=the average of the fixed effects v_i? Is this an obvious result? I am mistaken somewhere? Next, by looking at the example I tried to recover the constant reported in -xtreg from the regression with dummy variables. Am I correct to compute 7.545455 (constant of the fe estimator) =( 4 + (4-2.5) + (4+4.333) + (4+10.333))/4 7.0415 (the average of the fixed effects in the regression dummy specification) ? Many thanks!!! JL * * For searches and help try: * http://www.stata.com/help.cgi?search * http://www.stata.com/support/faqs/resources/statalist-faq/ * http://www.ats.ucla.edu/stat/stata/

**Follow-Ups**:**Re: st: constant in -xtreg (yes, again!)***From:*Scott Merryman <scott.merryman@gmail.com>

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