Dear All,

I have a more general question, that I would like to discuss with you:
In a pooled model I am using, I need to control for peer fixed effects. The challenge is now that every individual has their own peer -- noone has the same peer. Thus, peer fixed effects equal individual fixed effects. However, as I only have 170 individuals over 5 years in the model, including dummies per individual (i.hhid) results in collinearity problems. Using FE-estimation also does not make sense, as I am also interested in the isolated effects of time-invariant characteristics.

As I do not need to interpret these individual fixed effects (but control for them), I wonder whether I could also use the individual trend (hhid) instead. Would it make sense from an econometric perspective??

Any thought on that is highly appreciated!
Kerstin