Dummy Variable (near matrix error)

For econometric discussions not necessarily related to EViews.

Moderators: EViews Gareth, EViews Moderator

rafrods
Posts: 5
Joined: Mon Apr 05, 2021 5:32 pm

Dummy Variable (near matrix error)

Postby rafrods » Mon Apr 05, 2021 5:44 pm

Hello. I am estimating a regression between the GDP and social spending of municipalities and I am trying to insert a dummy variable for municipalities in the metropolitan region (municipalities in the metropolitan region = 1; municipalities outside the metropolitan region = 0). But Eviews is displaying the near matrix error message when I use a panel regression for fixed effects or random effects, and when I select neither effect, the error message does not appear. However, when I analyze the correlation matrix, it is clear that there is no perfect correlation between the dummy variable and the other variables in the equation. What could be causing this error?
Last edited by rafrods on Mon Apr 05, 2021 6:20 pm, edited 1 time in total.

EViews Gareth
Fe ddaethom, fe welon, fe amcangyfrifon
Posts: 12824
Joined: Tue Sep 16, 2008 5:38 pm

Re: Dummy Variable (near matrix error)

Postby EViews Gareth » Mon Apr 05, 2021 5:49 pm

Run this code:

Code: Select all

wfcreate u 100
series y=@nrnd
series x1=@nrnd
series x2=@nrnd
series x3 = x1+x2
group g x1 x2 x3
show g.corr
equation eq1.ls y c x1 x2 x3
Follow us on Twitter @IHSEViews

rafrods
Posts: 5
Joined: Mon Apr 05, 2021 5:32 pm

Re: Dummy Variable (near matrix error)

Postby rafrods » Mon Apr 05, 2021 6:28 pm

Hello Garreth, can I ask you two questions? The first is that I noticed, and edited my post, that the message near matrix error appears when I use a panel regression for fixed effects or random effects, but not when I select neither effect (effects specification; cross -section; none).

The other question is whether you could translate this command, considering that y = GDP; x1 = leducation; x2 = lhealth; and the dummy variable = dummyGV

Thank you for your attention


Return to “Econometric Discussions”

Who is online

Users browsing this forum: No registered users and 14 guests