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  • Using Binary Explanatory Variables in Panel Dataset Regression Analysis

    Hello,

    I am using Stata 15.1 on Windows 10.

    I have an Unbalanced Panel Data set on crime rate (continuous variable) with i=700 and t = 28 and N= 1085.

    Some of my explanatory variables are of the Binary Form (Available =1, Not Available =0), as they are infrastructure-related;
    For example independent variable "Access to Markets" will be of form: 1, if the market is available within 10 km or 0, otherwise.


    There are 5 such Binary explanatory Variables and 4 continuous explanatory variables. Most of the variation in the data is across the Cross-Section, as the variables are slow-moving over time.

    My question:

    I would like to understand out of Fixed Effects Model, Random Effects Model or GLS Model or any other model specification that would fit my dataset?
    And whether Fixed Effect Model can be applied when there are Binary Explanatory Variables (as I am unable to find any clear literature on it).

    Thank You.

    Regards,
    Shreya Sethi
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