0
$\begingroup$

If i use time dummies in a OLS pooled regression, does it imply time fixed effects?

Maybe to clear things up: 1)There is a pooled time -series-cross-section regression, the equation uses time dummies. The estimation Method is described as: OLS with time fixed effects.

2)Now I have another Paper: They used Panel Data and both bilateral fixed effects and year dummies to adjust for unobserved time invariant heterogeneity. --> Are year dummies = time effects, and are they fixed?

3)Same Paper as in 2) uses now Panel Data with bilateral fixed effects and Country-and-Time effects [it, jt]. Are Country-and-time effects also fixed or are non fixed effects possible?

Would be nice if some one can answer my questions, it is really important for me. Thx

$\endgroup$
1
$\begingroup$

Ok, found this in internet:

"Time dummy is a variable which equals 1 for a given year and 0 for all other years. It allows to control for time-specific fixed effects i.e. shocks which impact is restricted to a given time-period, affects or panel units and are not controlled by other explanatory variables. " source: https://www.researchgate.net/post/Is_anyone_familiar_with_Time_Trends_vs_Time_Dummies

And: " Year effects (more simply known as “year dummies”" Source: https://www.dartmouth.edu/~ethang/Lectures/Class17/Always%20Control%20for%20Year%20Effects%20in%20Panel%20Regressions.pdf

So i think the use of Time dummies, are Time effects! But if time effects are always fixed I dont know.

$\endgroup$

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.