How to run a regression using dummy variable

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Joined: Sat Dec 05, 2009 2:28 pm

How to run a regression using dummy variable

Postby donald0723 » Sat Dec 05, 2009 2:56 pm

Dear All,

I am currently trying to run a regression for my term paper involving a dummy variable. Though I have used E-views briefly twice before I am not too familiar with the problem(I followed my professor's instructions step by step and did not encounter many problems). Unfortunately I am now trying to run a regression involving how exchange rate fluctuations on China to Japan exports and have been totally lost. I've been following the user manual but it has been very confusing and unclear(the manual does not account for changes in context). Anyways I was wondering if anyone could advise me on how to run the following regression.

cjx= c+ XR+ XRD+ GDPJ


Change in China to Japan exports= constant + exchange rate(RMB/Yen)+
exchange rate dummy + GDP per capita of Japan(demand)

I have entered all my data into eviews, with the dummy variable, XRD containing values of 0 for all years before 2005(year of RMB de-peg), and 1 for all values after 2005. The significance level of this variable will tell me whether or not the de-pegging had significant effect on volume of trade.

Currently, I have been following the manual instructions by typing:

cjx c xr xrd gdpj

But been getting an error message involving @expand, a function involving the dummy variable. I looked this up on the guide which told me the syntax for the dummy should be @expand((xrd)). However typing this into the function has not been helpful.

Actually, I believe there may be something else wrong with how I am attempting to run the regression as I have tried removing the dummy variable and the equation won't run. Is there anybody who could help me out as to how to set up and run this equation? I would really appreciate it.


** note I am currently using version 5.1

Posts: 5
Joined: Mon Nov 30, 2009 10:20 am

Re: How to run a regression using dummy variable

Postby Machiavelli » Sun Jan 03, 2010 2:44 am

unfortunately, I can't help you, but I've got a similar problem: In my case, I have "developing country" as dummy, and I want to allow different values for each variable for developing countries, in contrast to developed, in a growth model. The manual didn't really help me as well.

EViews Glenn
EViews Developer
Posts: 2583
Joined: Wed Oct 15, 2008 9:17 am

Re: How to run a regression using dummy variable

Postby EViews Glenn » Thu Jan 07, 2010 12:10 pm

You all will have to be more precise about exactly what you are doing as it is hard to figure out from these snippets of discussion.

For example, I can't tell where @expand comes into the picture, since entering

cjx c xr xrd gdpj

into the equation dialog has no @expand in it. Nor am I certain that the above is indeed being entered into the equation dialog.

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