Dear Statalisters,
I have a quick question regarding ordered logits.
I have a panel dataset with individuals and t=2. I use the following xtset
xtset individual year
I then run a simple ordinal logit
1. xtologit y x1 x2 x3 x4, vce(cluster state)
Now my question: ALL individuals lived in the same state in period 1 and period 2. I.e. no one moved, but people are living in different states. I cluster for states, as can be seen above.
Does it make sense to include dummies for each individual state in the regression? I can not really wrap my head around it. It would then look.
2. xtologit y x1 x2 x3 x4 i.state, vce(cluster state)
Is 1. or 2. better? Or does it depend on other factors?, If yes - which ones?
Many thanks in advance,
Andreas
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