Re: st: Fixed effects and time dummy variables

["Daniel Ayalew" <danielayalew@hotmail.com>]

Dear Liliana,

if your model is a two period panel then you need to drop one of the time dummies; otherwise there will be a problem of perfect multicollinearity...

 

>From: Liliana Ramirez

>Reply-To: statalist@hsphsun2.harvard.edu

>To: statalist@hsphsun2.harvard.edu

>Subject: st: Fixed effects and time dummy variables

>Date: Mon, 9 Jun 2003 18:17:43 -0400 (EDT)

>

>Dear statalist,

>

>I am trying to perform regressions using xtreg command and fe.

>But when I am trying to control for time effects using dummy variables

>stata drops them inmediately. I have the same problem when controlling for

>geography.

>

>my regression looks like the following:

>

>xtreg loggdpp disteq openk ki kg unempl yr_1970 yr1980, fe

>

>Thanks for your help.

>

>Liliana

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