Hi,
I´m doing a difference-in-difference regression on the causal relationship between income tax and income. In that regard, I want to control for age, but I'm not sure what is the correct way.
Age in my dataset goes from 20 to 120, rounded up to the nearest 10 years.
I have tried three different ways and they all give me almost the same result. I'm not quite sure how they work differently from each other. Do you recommend some of them? Or, have any other suggestions?
The three ways I have tried is:
1. i.decile_age#c.year <-- created decile of age
- this omitted 10. decile because of collinearity
2. i.age <-- just used age as it is in the dataset
- this omitted 80, 90, 100, 110, and 120 because of collinearity
3. i.decile_age
- This one omitted decile 3, 4, 6, 9, 10 because of collinearity
I have attached the whole regression code below.
Thank you so much in advance!
Best,
Anders
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