Hi there - this is my first post so hope I'm following the guidelines properly.
I'm running a temporal model (code and output attached below) using the reghdfe command in Stata and my region fixed effects (absorbed) are perfectly colinear with no10, which is a continuous, time invariant variable defined at the region level. Therefore, there needs to be a reference category on c.no10#i.year, as including all interaction terms would reconstruct no10 which would be perfectly colinear with region fixed effects.
For some reason, the command omits 2023 for the no10. I want it to omit the interaction for the first year, 2012, to be consistent with the i.year reference category. I've tried iterations with ib2012.year ib2012.year#c.no10 etc, but it keeps omitting 2023. Is this a default reghdfe setting to omit the final year, or am I missing something econometrics-wise?
additional note: when i drop the region fixed effects it estimates a model with a simpler interpretation, with 2012 omitted only for i.year and included for the rest, which makes sense as no10 is no longer colinear in the model.
Here is the command and output:
I'm running a temporal model (code and output attached below) using the reghdfe command in Stata and my region fixed effects (absorbed) are perfectly colinear with no10, which is a continuous, time invariant variable defined at the region level. Therefore, there needs to be a reference category on c.no10#i.year, as including all interaction terms would reconstruct no10 which would be perfectly colinear with region fixed effects.
For some reason, the command omits 2023 for the no10. I want it to omit the interaction for the first year, 2012, to be consistent with the i.year reference category. I've tried iterations with ib2012.year ib2012.year#c.no10 etc, but it keeps omitting 2023. Is this a default reghdfe setting to omit the final year, or am I missing something econometrics-wise?
additional note: when i drop the region fixed effects it estimates a model with a simpler interpretation, with 2012 omitted only for i.year and included for the rest, which makes sense as no10 is no longer colinear in the model.
Here is the command and output:
Code:
reghdfe outcome ib2012.year c.no10#ib2012.year c.no10#i.year#i.group if outcome>=0, a(i.region)
Code:
(MWFE estimator converged in 1 iterations) note: 2023.year#c.no10 omitted because of collinearity HDFE Linear regression Number of obs = 174,981 Absorbing 1 HDFE group F( 34, 174619) = 95.88 Prob > F = 0.0000 R-squared = 0.0386 Adj R-squared = 0.0366 Within R-sq. = 0.0183 Root MSE = 17.4918 outcome Coefficient Std. err. t P>t [95% conf. interval] year 2013 -.6430878 .9695935 -0.66 0.507 -2.543469 1.257294 2014 -1.603839 .9730478 -1.65 0.099 -3.51099 .3033134 2015 -.8338722 .9750366 -0.86 0.392 -2.744922 1.077178 2016 -1.497623 .9581186 -1.56 0.118 -3.375514 .380268 2017 -1.245818 .9719537 -1.28 0.200 -3.150825 .6591894 2018 -1.107834 .977889 -1.13 0.257 -3.024474 .8088066 2019 -1.497494 .9760138 -1.53 0.125 -3.410459 .4154711 2020 -5.111335 .977514 -5.23 0.000 -7.02724 -3.195429 2021 -5.100234 .9978856 -5.11 0.000 -7.056067 -3.1444 2022 -3.418208 1.021382 -3.35 0.001 -5.420095 -1.416322 2023 -2.677439 1.03587 -2.58 0.010 -4.707721 -.6471563 year#c.no10 2012 .0957184 .3394871 0.28 0.778 -.5696687 .7611056 2013 .3320111 .3420725 0.97 0.332 -.3384433 1.002466 2014 .5165182 .3432691 1.50 0.132 -.1562815 1.189318 2015 .1656705 .3438548 0.48 0.630 -.5082773 .8396182 2016 .2775079 .338472 0.82 0.412 -.3858897 .9409055 2017 .224865 .3428359 0.66 0.512 -.4470856 .8968156 2018 .0349294 .3442548 0.10 0.919 -.6398023 .7096611 2019 .0623301 .3438025 0.18 0.856 -.6115151 .7361754 2020 .7712322 .3441665 2.24 0.025 .0966736 1.445791 2021 .6356324 .3500851 1.82 0.069 -.0505265 1.321791 2022 .266529 .3571284 0.75 0.455 -.4334346 .9664926 2023 0 (omitted) year#group#c.no10 2012 1 -1.847835 .2332402 -7.92 0.000 -2.304981 -1.39069 2013 1 -1.823049 .2332893 -7.81 0.000 -2.280291 -1.365807 2014 1 -2.360965 .2308371 -10.23 0.000 -2.813401 -1.90853 2015 1 -2.789325 .224443 -12.43 0.000 -3.229228 -2.349422 2016 1 -3.111973 .2115982 -14.71 0.000 -3.5267 -2.697245 2017 1 -3.235186 .2152065 -15.03 0.000 -3.656986 -2.813387 2018 1 -3.016327 .2135707 -14.12 0.000 -3.434921 -2.597734 2019 1 -3.213313 .2091915 -15.36 0.000 -3.623323 -2.803302 2020 1 -3.682523 .2019657 -18.23 0.000 -4.078372 -3.286675 2021 1 -3.748953 .2120809 -17.68 0.000 -4.164627 -3.333279 2022 1 -3.223094 .2201608 -14.64 0.000 -3.654604 -2.791584 2023 1 -2.973004 .2218493 -13.40 0.000 -3.407824 -2.538184 _cons 74.41839 1.022906 72.75 0.000 72.41352 76.42327 Absorbed degrees of freedom: Absorbed FE Categories - Redundant = Num. Coefs - region 328 0 328
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