Re: st: Fixed Effects estimation with time-invariant variables

["ALICE DOBSON" <alice_dobson@hotmail.com>]

I do not understand why one would do that? Rather, what purpose would it 
serve?
Best,
Alice


> From: David Jacobs <jacobs.184@sociology.osu.edu>
> Reply-To: statalist@hsphsun2.harvard.edu
> To: statalist@hsphsun2.harvard.edu
> Subject: Re: st: Fixed Effects estimation with time-invariant variables
> Date: Tue, 26 Jul 2005 16:08:11 -0400
>
> If you create interaction terms between between three of the four possible 
> dummies computed on your periods and multiply these dummies by one of your 
> time invariant explanatory variables, your fixed-effects equation will 
> produce estimates for these interacted "ex" time-invariant effects.  See 
> Charles Halaby's piece on panel estimation in an Annual Review of Sociology 
> about two to four years ago.
>
> Dave Jacobs
>
> At 01:56 PM 7/26/2005 +0100, you wrote:
>
> > Fixed Effects estimation with time-invariant variables
> >
> > I have a problem and I wonder whether anyone can help. I have a panel
> > dataset of 32 Sub-Saharan African countries and four time periods
> > (N=32, T=4). I am looking at the determinants of aid for these
> > countries. Given that they are not randomly selected countries, I am
> > using Fixed Effects. However, I have a few time-invariant variables
> > that are important but that get dropped because of using FE.  Is there
> > any way of obtaining estimates for these time-invariant variables and
> > still use FE?  Also, given the data I'm using, is there any
> > justification for using Random Effects?
> >
> > Any comments would be much appreciated.
> >
> > Thanks.
> > Joana
> >
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