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Tuesday, December 29, 2020
problem in a model because of collinear variables
Hi I am estimating an environment kuznets curve, which generically can have the following specification
C_it=α_it+〖β_1 Y〗_it+〖β_2 Y〗_it^2+...
C- co2 emissions
Y- gdp per capita
However, when estimating the model, the B_2 coefficient is omitted due to collinearity,,
In studies have been able to calculate this coefficient. I don't know if I have to add something to the command code or if it could be an error in the construction of the variable Y-first i turn the var into per capita, then i raised it to square and only then applied logharitms.
thank you for your attention
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