Basic question on MLR

elra

New Member
#1
Hi there,

It's a pretty basic question but I lack the statistical knowledge to answer it myself.
I have a panel dataset which includes information about the management of funds (sometimes a team).
I am interested in gender effects, so i created dummies for "mixed-gender management" and "all-female management" which are my independents of interest.
As a second step in the analysis, I want to add a team dummy (1 if team-managed, 0 if single-managed) to control for team effects.
My question is, does this create a problem in the regression as "mixed-gender management" is ALWAYS team managed and "all male" or "all female" could be both team- and single managed?

Thanks a lot! :)
 

Buckeye

Active Member
#2
I don't think this is an issue in your case. You typically run into problems if your independent variables are highly correlated with each other or one of your variables is a linear combination of other variables. The software will probably throw errors at you in the latter case.

Below would cause issues because Column 3 = 1*(Column 1) + 1*(Column 2):
1648591488164.png

From your description it sounds like you can have this case which causes no problems:
1648591893259.png
 
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