I am using Stata 14.2 and have a data set I want to analyise. My script is as follows: xtregar y x1 x2 x3 x4 x5 x6 , fe
Now both x5 is a dichotomous variable classifying the sample into two industry types, x 6 has 4 values but again the value is the same for each company in the sample. When I run the script Stata drops x5 and x6 due to collinearity. In order to test assumptions I also run a normal regress and here Stata does not drop those variables. I am sure that makes total sense to you but could you explain why this is happening?
Thank you!
Now both x5 is a dichotomous variable classifying the sample into two industry types, x 6 has 4 values but again the value is the same for each company in the sample. When I run the script Stata drops x5 and x6 due to collinearity. In order to test assumptions I also run a normal regress and here Stata does not drop those variables. I am sure that makes total sense to you but could you explain why this is happening?
Thank you!
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