Open WilliamCMU opened 4 years ago
Dear William,
In theory, it is allowed. I think the error occurs because of perfect collinearity of the some of the dummy variables you added. Note that adding many more fixed effects this way will render the algorithm extremely slow.
Best, Yiqing
On Tue, Mar 17, 2020 at 11:04 AM WilliamCMU notifications@github.com wrote:
Hi, I'm having issues with including control variables in gsynth. These controls are industry fixed effects. I am receiving the following error message:
Error in gsynth.default(formula = NULL, data = data, Y = Yname, D = Dname, : Variable "total.SICCD.f1381" is unit-invariant. Try to remove it.
Does this error imply that this method can not include fixed effects beyond unit and time specifications? The variable it is flagging is a dummy variable reading 1 for firms in a certain industry and 0 otherwise. There are around 40 of these dummies. If I remove this variable it sends the same message for the next variable of this kind.
Thanks, WC
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-- Yiqing Xu
Assistant Professor Department of Political Science Stanford University http://yiqingxu.org/
You should not put id variable and dummy industry variables in your model at once, that will cause Multicollinearity problem. In my opinion, some papers said they control industry fixed effect, that means they don't control individual fixed effect。
Hi, I'm having issues with including control variables in gsynth. These controls are industry fixed effects. I am receiving the following error message:
Error in gsynth.default(formula = NULL, data = data, Y = Yname, D = Dname, : Variable "total.SICCD.f1381" is unit-invariant. Try to remove it.
Does this error imply that this method can not include fixed effects beyond unit and time specifications? The variable it is flagging is a dummy variable reading 1 for firms in a certain industry and 0 otherwise. There are around 40 of these dummies. If I remove this variable it sends the same message for the next variable of this kind.
Thanks, WC