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A question about dummy variable
Posted: Fri Jul 15, 2016 2:20 am
by eisamabodian
Which of these forms is correct for a dummy variable?
Model A)
Code: Select all
1 : T>=S
0 : T<S
S=Structural break date
Model B)
Code: Select all
1 : T>S
0 : T<=S
S=Structural break date
Re: A question about dummy variable
Posted: Fri Jul 15, 2016 5:37 am
by startz
Either is fine. They differ in whether date T is on or off.
Re: A question about dummy variable
Posted: Sat Jul 16, 2016 7:09 am
by eisamabodian
Either is fine. They differ in whether date T is on or off.
What does mean on or off?
Re: A question about dummy variable
Posted: Sat Jul 16, 2016 7:16 am
by startz
Which side of the structural break do you want observation T to be in.
Re: A question about dummy variable
Posted: Sun Jul 17, 2016 2:27 am
by eisamabodian
Which side of the structural break do you want observation T to be in.
Is this arbitrary ?
Can we use both of this forms in empirical works?
Because in some papers I see Model A , while in others I see Model B.Is the result is the same in both of these situations or is different?