I am working on the Chinese economy and I want to estimate the Chinese export demand function for 1988-2011 with more than 130 countries. I want to estimate the regression equation given below.
log(export)it=β0+β1log(realgdp)it+β2log(population)it+β3politicalstabilityit+β4realexchangerateit+εit
Where log(export)it is the (log) of the export from china to other countries and t=1988,…,2011.
my research, I want to control for the effect of Chinese GDP and population on Chinese export in EViews 7 in a panel estimation. without controlling for these two variables I can run a panel estimation in EViews but when i try torun my estimation with control variables eviews give the error(singular matrix). Any help is greatly appreciated.
malik fahim
controlling variables in panel data
Moderators: EViews Gareth, EViews Moderator
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EViews Gareth
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Re: controlling variables in panel data
Dummy variable trap.
Re: controlling variables in panel data
can you please let me know how can i solve this problem.
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EViews Gareth
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Re: controlling variables in panel data
Drop one of your dummies.
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