Hello everyone ,
I am estimating gravity model with 3-dimensional panel data set (exporter, importer and year), including 24 countries and 18 years (2000-2017), so there are 24x23x18=9936 observations. I have created some fixed effects as follow:
For time fixed effect: tab year, gen(time_fixed)
For exporter fixed effect: tab Exporter, gen(exp_fixed)
For importer fixed effect: tab Importer, gen(imp_fixed)
For pair fixed effect:
egen pair_id = group(Exporter Importer)
tab pair_id, gen(pair_id_fixed)
My questions are:
1. if I want to run pooled OLS, should I use
reg Y X1 X2 X3
or
tsset pair_id year
xtreg Y X1 X2 X3
2. if I want to add only time fixed effect, should I use
reg Y X1 X2 X3 time_fixed*
or
tsset pair_id year
xtreg Y X1 X2 X3 time_fixed*
3. if I want to include time fixed effect, exporter fixed effect, importer fixed effect and pair fixed effect, should I use
reg Y X1 X2 X3 time_fixed* exp_fixed* imp_fixed* pair_id_fixed*
or
tsset pair_id year
xtreg Y X1 X2 X3 time_fixed* exp_fixed* imp_fixed*, fe
Thank you very much for your kind attention
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