Dummy Variables (Fixed Effects)

Using tenuredata.dta (restricted to rice == 1):

• Instead of manually demeaning the data, use the i. operator to include a fixed effect dummy for every individual household (panelid).
• Run a regression of raw yield on q_f_ha and your dummy variables (i.panelid). Cluster the standard errors by panelid.

Does the regression even run on your version of Stata? If so,

1. Use eststo to save the LSDV results. Then adapt the table structure from the previous exercise to create a table of results with a fourth column headed LSDV.
2. What is the coefficient on fertilizer in the LSDV regression and how does it compare to the coefficients you calculated in Exercises 1 and 2?

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