I am currently running analysis on a 2-period panel data set from China. I use a Fixed Effects model for some regressands, an ordered logit model for others.
I do have non-responses for some of my regressors, this causes my observations to drop. What I do for the FE model is the following:
I create a dummy which I set to 1 if the value in my regressor is missing. I then change the missing values in my regressor to 0 and include both in the regression. For my FE, this yields very similar results to when I accept the deletion of variables, however I am now able to use all observations.
This is a code example for my education variable
Code:
First I would do: xtreg y edu --> uses 49.000 observations then i do: gen eduX=0 replace eduX=1 if edu==. replace edu=0 if edu==. and now i run: xtreg y edu eduX --> now uses full 72.000 observations, results are very similar
Code:
xtologit y edu --> uses 49.000 observations xtologit y edu eduX --> uses 72.000 observations but results VERY different.
Many thanks in advance!!
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