# Collinearity in time dummies, fixed effect regression

I am running a fixed effect panel regression with 81 groups x 20 periods, so approx 1620 (unbalanced) observations.

I use the following to create dummies:

*create timedummy
tabulate refper, generate(refdummy)


which to visual inspection looks fine. But when running the xtreg, it removes 6 time dummies due to collinearity. Can anyone explain what is happening here?

• Note that as you've given some Stata syntax, adding the actual xtreg command you used would be consistent with that and is in fact the single piece of Stata information that is most relevant. That aside: there is a statistical question here, but what is it precisely? Do want to know what collinearity means? If not, what kind of explanation do you seek? We don't have your data to look at correlations or scatter plots but you can do that. – Nick Cox Mar 6 '14 at 13:39