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  • smart ways to generate interaction dummies

    Dear all,
    Hi, I have a dataset with T=52 annual observations. I want to create dummy variables for all years. I can do this by

    tab year, gen(year)

    For the sake of example, let me take T=4. The command generates tab1 (1 if year==1, 0 otherwise), tab2 (1 if year==2, 0 otherwise), tab3 (1 if year==3, 0 otherwise), tab4 (1 if year==4, 0 otherwise).
    In addition to these plain dummies, I want to generate interaction dummies with, say, independent variable x. I can do this in a brute force manner by

    gen x1=x*tab1
    gen x2=x*tab2
    gen x3=x*tab3
    gen x4=x*tab4

    My first question is, is there a more efficient way of generating interaction dummies x1, x2, x3?

    I can then run a regression like

    reg y tab2 tab3 tab4 x x2 x3 x4

    My second question is, is there a more efficient way of writing out this regression? For example,

    reg y tab2-4 x x2-4

    or something along that line.

    I'd be really grateful for any and all advice. Thank you very much in advance!

    Best,
    John

  • #2
    I'd use factor variables for this. See help fvvarlist for more info.

    For this example, assuming x is an indicators, you probably want something like:
    reg y i.year##i.x

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