Hi, I'm looking at the effect of city budgets on corruption for an assignment. We have two periods 2001 and 2005 so I'm considering the budget in 2001 as the continuous treatment with city and period fixed effects. When I run the following code
The treatment is being dropped due to multicollinearity. Are there alternative ways of coding this or framing the treatment different. Sorry for the basic question!! Thanks in advance!!
Code:
gen initial_budget = budget replace initial_budget = l4.budget if term==2005 areg outcome initial_budget i.term, absorb(city) cluster(city)
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