Hi all,

I am a master student and I am trying to estimate a gravity model but I think I have some problems with that. I have a database with 1,663,200 observations referring to the exports and imports divided by 120 products of 22 regions in Italy with 35 countries for the period 1995-2012 . I want to include fixed effect of origin, products, time and destination.

For this I have created dummy variables for each of these using:

xi i.region*i.year, prefix(O*)

xi i.product*i.year, prefix(P*)

xi i.country*i.year, prefix(C*)

At the end of this process I have nearly 4,000 variables. Now I am trying to use ppml including first separated fixed effects for each region, product, year and country and then the combined fixed effect.

ppml dep. var. indep. variables(n°14) dummy variables for region, product, country and year, cluster(indicators of each triple link of region, country and product)

The problem is that I have started the process yesterday with the first step and Stata is still elaborating iteration (at the moment n°245). Is this normal for the dimensions of the database or there is a problem with the formulation of the command or my estimation of the model?

Thanks everybody

I am a master student and I am trying to estimate a gravity model but I think I have some problems with that. I have a database with 1,663,200 observations referring to the exports and imports divided by 120 products of 22 regions in Italy with 35 countries for the period 1995-2012 . I want to include fixed effect of origin, products, time and destination.

For this I have created dummy variables for each of these using:

xi i.region*i.year, prefix(O*)

xi i.product*i.year, prefix(P*)

xi i.country*i.year, prefix(C*)

At the end of this process I have nearly 4,000 variables. Now I am trying to use ppml including first separated fixed effects for each region, product, year and country and then the combined fixed effect.

ppml dep. var. indep. variables(n°14) dummy variables for region, product, country and year, cluster(indicators of each triple link of region, country and product)

The problem is that I have started the process yesterday with the first step and Stata is still elaborating iteration (at the moment n°245). Is this normal for the dimensions of the database or there is a problem with the formulation of the command or my estimation of the model?

Thanks everybody

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