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How do I create a dummy variable to correct for structural break within my data?
for example by looking at the resid graph shows a structural break in 1988 in my data

Data i have got given
c - constand
m
resid
r
y

kind regards
A

series dummy = @year>1988

Thanks but when i do this, the coefficients change. aren't they meant to stay them same?

Kind regards
A.

Thanks but when i do this, the coefficients change. aren't they meant to stay them same?

Kind regards
A.

No, if the coefficients were going to stay the same what would you be correcting?

Oh thats true. thanks!

Also when use the dummy variable for lets say 1988

in my data for the dummy variable 1988 = 1 and all the rest of the dates are = to 0

but then if i in my data for the dummy variable 1988= 0 and the rest of the dates = 1

the coefficients are different from when 1988 = 1

which is correct?

Kind Regards

A.

Only the constant should have changed.