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I have a panel of 7 countries, identified by the variable id. When I run the following regression
xi: reg y x1 x2 i.year i.id
as expected, Stata omits the first dummy of both the id and year sets of dummies.
The strange thing is that it also drops another dummy variable of both the mentioned sets of dummies, but it uses in the estimation the corresponding country and year.
Could you please help me in understanding the reason behind this dropping?
thank you in advance
Department of Economics anad Statistics
University of Calabria
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