Re: st: RE: RE: estimation with a time trend.

[natasha agarwal <agarwana2@googlemail.com>]

On Mon, Jul 5, 2010 at 2:01 PM, Nick Cox <n.j.cox@durham.ac.uk> wrote:
> Your original question was
>
> "I was trying to estimate a production function with an unbalanced
> firm-year panel data and wanted to include a time trend. However I was
> not sure if the time trend was created correctly.
>
> egen t=group(year)
>
> I was wondering if anyone could please tell me if this was correct?"
>
> Who knows whether the commands you are using "mean center" the data if
> you do not tell us what they are?

I am sorry about this.

I issue the following line of commands:

egen t=group(year)
xtreg lnrval lnk lnw lnvfdi t, fe vce(robust)

Thanks
Natasha





> Nick
> n.j.cox@durham.ac.uk
>
> natasha agarwal
>
> On Mon, Jul 5, 2010 at 1:14 PM, Maarten buis <maartenbuis@yahoo.co.uk>
> wrote:
>
>> --- On Mon, 5/7/10, natasha agarwal wrote:
>>> I am afraid I did not understand "year- (or -year-
>>> MINUS> midpoint) for interpretability?"
>>
>> Say you have a variable representing year of birth
>> ranging between 1910 and 1980. I would then usually
>> have a line like this in my do-file:
>>
>> gen c_year = year - 1910
>>
>> Afterwards I would use c_year instead of year. In
>> this case "midpoint" is 1910, and makes sure that
>> your new variable is shifted to the left such that
>> it has the value zero in 1910. This makes sure
>> that the baseline in your models refer to a point
>> at the beginning of your observed period. This is
>> particularly important if you include interactions
>> or if you care about the constant (e.g. in a random
>> effects model)
>
> I am estimating the model with a within estimator. I thought that they
> mean center the data anyways?
>
>
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