Re: st: xttobit & stata 12: Initial values not feasible

[Maarten Buis <maartenlbuis@gmail.com>]

On Tue, Jul 3, 2012 at 3:39 PM, Surender Komera wrote:
> I have not centered explanatory variables (x variables). How can i do
> that? It will be really helpful if you can explain.

Say you have year of birth, than you would not want to enter it as is
in a random effects model. A lot of the (random) action in random
effects models is in the constant, and if you entered year of birth as
is than that would (typically) be a huge extrapolation, i.e. it would
refer to people born in the year 0. Say you want to center at 1950,
than you just create a new variable which contained the year of birth
- 1950. You can pick any number that is meaningful as long as it is
within (or close to) the range of your data. This is something you
only want to do to your continuous explanatory variables, not your
dependent variable an not to any of the indicator (dummy) variables.

-- Maarten

--------------------------
Maarten L. Buis
Institut fuer Soziologie
Universitaet Tuebingen
Wilhelmstrasse 36
72074 Tuebingen
Germany


http://www.maartenbuis.nl
--------------------------
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