st: Re: Binary variable after first-differencing

["Sergiy Radyakin" <Radyakin@aoek.uni-hannover.de>]

Hello Kevin!

sort Firm year
by Firm: gen difdummy=dummy if _n==1
by Firm: replace difdummy=dummy+difdummy[_n-1] if _n>1

This should generate the sequence you desire, though I haven't got your 
motivation for the transformation of the variable.
Besides notice that diffdummy is not a dummy anymore :)

Regards, Sergiy Radyakin



----- Original Message ----- 
From: "Amess Kevin" <Kevin.Amess@nottingham.ac.uk>
To: <statalist@hsphsun2.harvard.edu>
Sent: Monday, March 05, 2007 9:23 PM
Subject: st: Binary variable after first-differencing



> Dear All,
>
> I would very much appreciate help on the following problem. My panel
> data contain both continuous and binary variables. I want to estimate a
> model in first differences but would like to incorporate a binary
> variable. So that the binary variable is not first-differenced out of
> the equation I want to create difdummy (see below). Basically, I do not
> know how to create difdummy. Below illustrates my data:
>
> Firm year dummy difdummy
> 1 1993 0 0
> 1 1994 0 0
> 1 1995 1 1
> 1 1996 1 2
> 1 1997 0 2
> 1 1998 0 2
> 2 1993 1 1
> 2 1994 1 2
> 2 1995 1 3
> 2 1996 0 3
> 2 1997 0 3
> 2 1998 0 3
> 3 1993 0 0
> 3 1994 0 0
> 3 1995 0 0
> 3 1996 0 0
> 3 1997 1 1
> 3 1998 1 2
>
> Regards,
> Kevin
>
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