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You want to consult Baum (2006), chapter 9.1.1, where this is explained
quite clearly. See
http://www.stata-press.com/books/imeus.html
HTH
Martin
-----Ursprüngliche Nachricht-----
Von: [email protected]
[mailto:[email protected]] Im Auftrag von Asgar
Khademvatani
Gesendet: Freitag, 27. Februar 2009 19:48
An: [email protected]
Betreff: st: LSDV vs. FE
Hello All,
In general, I understand that LSDV estimation method is an alternative
way of modeling fixed-effectsin in panel data approach , or it is
equivalent to FE method. But, in STATA, we can specify a LSDV model in two
ways:
(1)with common constant as:
LS y d1 d2 d3 x1 x2 x3 or
(2)we can run it without constant or with non-constant option as:
(for example)LS d1 d2 d3 x1 x2 x3, nonconstant
I got a couple of concerns and questions as follows:
First, which syntax of LSDV given above is appropriate or reliable for
modeling a fixed-effects model? I mean it should be run with constant or
without constant as shown above?
Second, when we run FE model in Stata as:
xtreg y x1 x2 x3, fe
My question is that is this equivalent to LSDV with constant or without
constant?
Thank you in advance.
Regards,
Asgar Khademvatani
Ph.D. Candidate-Department of Economics
The Faculty of Social Sciences
University of Calgary,
2500 University Dr., NW., Calgary,
Alberta, Canada, T2N 1N4
Email: [email protected]
Tel: +1(403)210-2574
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