Regression Using Interaction Terms - PANEL DATA

#1
Good afternoon,


I am working with a panel data with more than 2000 observations and only two years. My topic is on "Full Risk Insurance" in rural households within a village. Thus, my regression is as follows:


log_Individual_Consumption = log_Individual_Income + log_Village_average_Consumption + errorterm

command: xtreg log_Individual_Consumption log_Individual_Income + log_Village_average_Consumption, fe



Now what I would like to add is an interaction term, more specifically a "Ethnolinguistic Fractionalisation Index EFL" which I have built and essentially shows the composition of the village in terms of tribes. Thus this index (EFL) only takes the value between 0 and 1.

Now my intentionis to analyse the influence of this index on "Full Risk Insurance" and to do so I need to interact village average consumption with the index such that I get how it affects the coefficient of Village_average_consumption when the index has a certain value.

I would like to ask what commands I could possibly use in order to carry out this regression. I have tried the one shown below and stata has returned that it does not have any more "room to add more variables". This is indeed possible because I have more than 650 villages, but is there any way that I could find a regression that is applicable accross villages?

Here is my current strategy: xi: reg log_Individual_Consumption log_Individual_Income log_Village_average_Consumption EFL i.log_Village_average_Consumption*EFL

I know that this is possibly wrong, but STATA knowledge is very limited in regards to interaction variables and panel data and would like to ask if anyone could help me with this.

Thank you