Noabsorb option for ivreghdfe

[Lisa Tara Smith]

Best users,

A bit of a general question, but how come the code (xrd is the dependent variable and predfirst is the instrument):

ivreghdfe xrd predfirst, cl(gvkey) noabsorb

gives

option noabsorb not allowed
r(198);

Would really appreciate your help.

[Joro Kolev]

ivreghdfe xrd predfirst, cl(gvkey) inventedoption

will give the same error message -- try it.

What are you trying to do?

[Andrew Musau]

ivreghdfe is from SSC (FAQ Advice #12). No such option is available. As the command is essentially ivreg2 (SSC) with the absorb option from reghdfe (SSC), you can either specify no option or create a constant variable and absorb that. Here is an example:

webuse nlswork
ivreghdfe ln_w age c.age#c.age not_smsa (tenure = union south)
gen group=1
ivreghdfe ln_w age c.age#c.age not_smsa (tenure = union south), absorb(group)