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

[David Jacobs <jacobs.184@sociology.osu.edu>]

It gives you a period specific estimate of the time-invariant variables 
effects.  Such estimates can be instructive.  For example, by not forcing 
the coefficients on the explanatory variable to be the same in different 
periods, you may find that a variable you thought did not matter 
does.  Such an analysis also can tell you if the effect in question is 
increasing or decreasing in strength.

Dave Jacobs

At 06:44 AM 7/27/2005 -0400, you wrote:

> 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
> > >
> > > *
> > > *   For searches and help try:
> > > *   http://www.stata.com/support/faqs/res/findit.html
> > > *   http://www.stata.com/support/statalist/faq
> > > *   http://www.ats.ucla.edu/stat/stata/
> >
> > *
> > *   For searches and help try:
> > *   http://www.stata.com/support/faqs/res/findit.html
> > *   http://www.stata.com/support/statalist/faq
> > *   http://www.ats.ucla.edu/stat/stata/
> _________________________________________________________________
> Don't just search. Find. Check out the new MSN Search! 
> http://search.msn.click-url.com/go/onm00200636ave/direct/01/
>
> *
> *   For searches and help try:
> *   http://www.stata.com/support/faqs/res/findit.html
> *   http://www.stata.com/support/statalist/faq
> *   http://www.ats.ucla.edu/stat/stata/

*
*   For searches and help try:
*   http://www.stata.com/support/faqs/res/findit.html
*   http://www.stata.com/support/statalist/faq
*   http://www.ats.ucla.edu/stat/stata/