I have data related to households with a number of variables with the dependent variable being household consumption. I need to specify an OLS regression to identify the treatment effect of interest but I do not have interest as a variable within the data provided. How would I go about creating this variable and introducing it as a shock to the data?
Hi, Lindi Mthembu
Without the data of the variable (either dependent or independent), you cannot enter it into a regression model.
If the variable is (nominal), has two states/yes/no
You can enter it into the model as a dummy variable with two values 0 when it does not happen and 1 when it does.
Note: The OLS model is not a research goal in itself. Choosing the model based on the necessary tests before any regression model is / normal distribution test, correlation test, linearity test, time series stability ... etc. /
https://www.statalist.org/forums/forum/general-stata-discussion/general/1493860-panel-data-with-shock
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