Thursday, January 28, 2021

XTIVREG, FE: needs to be FE in stage 1 and 2?

Hi all,

I'm running a fixed effects regression using an IV variable, but I'm wondering, do I need to have fixed effects in both stage 1 and stage 2? I see that fixed effects are automatically applied to both stages, but I'm not sure why. If I use fixed effects in stage 2, why do I need them in stage 1?

No comments:

Post a Comment