Thanks for the answer Kit and all, I tried to use the
command lincom in the following way:
The data set is (a sample):
var1 var2 var3 var4 var5 var6 var7
.576 1 0 0 1 0 0
.354 0 0 1 0 1 0
.542 1 0 0 0 0 1
.6354 0 1 0 1 0 0
.875 1 0 0 0 1 0
.524 0 1 0 0 0 1
.324 0 0 1 0 1 0
.643 1 0 0 1 0 0
.523 0 1 0 0 0 1
.089 0 0 1 0 1 0
and I regress :
reg var1 var2 var3 var4 var5 var6 var7
and it drops var4 and var7 due multicollinearity. And
I use lincom:
lincom var4
But still I can not get the estimation of this
parameter and the std error since it says dropped. Do
you have any clue how can I solve this?..
Thanks in advance,
Javier
--- Kit Baum <[email protected]> wrote:
> Javier wrote
>
> I would like to ask a question that I had before but
> I
> couldnt solve. The problem I have is the following:
> Im
> aplliying shif-share method in a regression of data
> panel. My dependent variable is the growth in
> employment and I have as independent variables
> dummies
> for industries, dummies for years and for regions.
> The
> problem arises because I loose one region, one year
> and one industrie because of the dummies use. I dont
> want to loose this since they are useful for the
> analysis I'm doing. Does anyone have an idea how to
> do
> this?.
>
> You can always include ONE complete (mutually
> exclusive and exhaustive)
> set of dummies in a regression by excluding the
> constant term. You gain
> nothing by doing so; the coefficients are just
> measured vs. zero rather
> than vs. the excluded class. But you cannot include
> TWO or more
> complete sets of dummies in a regression,
> irregardless of the treatment
> of the constant term, since each set of dummies sums
> to an iota vector
> of length N, and you can't have two of those in your
> regression. But
> then you don't need to; you can always calculate all
> the coefficients,
> in point and interval form, from the (G-1) dummies'
> coefficients. The
> lincom command is useful here.
>
> Kit Baum, Boston College Economics
> http://ideas.repec.org/e/pba1.html
>
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