Dear friends from the State community :
I estimated a model with dummy variables but when I take a look at the variance covariance matrix it has columns/rows with only zero values, corresponding to the baseline of the dummy variables. Hence the matrix is non-invertible.
For the sake of simplicity, let's consider a simple regression "reg y x i.gov" , with "gov" a dummy variable taking the values 1, 2 and 3. Of course the regression output doesn't include the first level of that dummy variable BUT when I see the VarCov matrix there is one column and one row for this base level (zeros), hence it is not invertible. The same happens if I consider a dummy variable taking values 0 and 1. I attach the regression output and the matrix. Can anyone lend me a hand? Many thanks..

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