Re: st: Trends and Time dummies

["Venkiteshwaran, Vinod" <Vinod.Venkiteshwaran@tamucc.edu>]

Hello Partha

I apologize for not making the specification more clear. 
I am attempting to run a regression precisely in the format you have specified in your response.
 I do have t-1 dummies to avoid the dummy variable trap. 
Adding a trend actually forces me to drop another dummy since the trend variable is a linear transformation of the remaining dummies in the model. 
Therefore in the model with the trend and year dummies I have t-2 time dummy variables. 
I think I follow the interpretation you have provided. 
What complicates the situation I have is in relation to which years were dropped. 
For example, if I drop the first two years, last two years or one at the beginning of the sample and one at the end of the sample. 

The focus of my study is on the coefficients of the time dummies and if there is a trend. 

Thanks for your input.

Vinod


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