Hi everyone,
I am having trouble implementing a simple least square dummy variable (LSDV) model.
The model I am implementing is the following:
reg log_wage i.vet_yes c.age i.vet_yes#c.age vetcountry female $control daustria dcanada dczechrepublic ddenmark destonia dfinland dfrance dgermany direland djapan dkorea dnetherlands dnorway dpoland dslovakrepublic dspain dsweden duk dusa [pw=weight_adjusted] , vce(robust)
In particular, vetcountry takes value of one if the country is a vocational oriented country, zero otherwise.
Now the main problem is that when running this regression stata drops two variables (dcanada and dgermany: a vocational and a general oriented country).
Am I right to believe that if the coefficients for Vetcountry is estimated, is only due to the fact that two country dummy have dropped from the model? Given that, does it mean that the coefficient estimated for Vetcountry might not be reliable? If so, do you have any suggestions on how to overcome this problem as I really need to estimate this essential independent variable?
Many thanks
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