st: xtoverid' command and 'sigma_u=0

["D. Demetriou" <dd358@cam.ac.uk>]

Hi everyone,

I am basically trying to use the 'xtoverid' command after performing an ' 
xi: xtreg, re vce(cluster) ' regression on panel data.
The problem here is that sigma_u (and hence rho subsequently) equals to 
zero (sigma_u = 0). Why might be I getting this?? The interesting thing 
here is that when I add a 'time dummy' (equals 1 for each period except the 
reference period) sigma_u is no longer zero.
Sigma_u=0 disables the 'xtoverid' command which I need to decide on FE Vs 
RE.
Here is the estimation table:


Random-effects GLS regression Number of obs = 90 Group variable: region 
Number of groups = 9
R-sq: within = 0.7575 Obs per group: min = 10
      between = 0.4357 avg = 10.0
      overall = 0.7426 max = 10

                                               Wald chi2(5) = 493.00 
corr(u_i, X) = 0 (assumed) Prob > chi2 = 0.0000
                                (Std. Err. adjusted for 9 clusters in 
region) 
------------------------------------------------------------------------------
            | Robust publicprov1 | Coef. Std. Err. z P>|z| [95% Conf. 
Interval] 
-------------+----------------------------------------------------------------
 hownership | -.0731302 .0143642 -5.09 0.000 -.1012835 -.0449769
    incvars | -.1222154 .0138148 -8.85 0.000 -.1492918 -.095139
 popabove60 | -.0387703 .0197494 -1.96 0.050 -.0774783 -.0000622
        ILO | -.2344766 .0418934 -5.60 0.000 -.3165863 -.152367
       wave | -.0623215 .0242992 -2.56 0.010 -.109947 -.0146959
      _cons | 30.88966 1.00746 30.66 0.000 28.91508 32.86425 
-------------+----------------------------------------------------------------
    sigma_u |          0
    sigma_e |  .29067783
        rho | 0 (fraction of variance due to u_i) 
------------------------------------------------------------------------------
*
*   For searches and help try:
*   http://www.stata.com/help.cgi?search
*   http://www.stata.com/support/statalist/faq
*   http://www.ats.ucla.edu/stat/stata/