Actually I used a very simple data set for the purporse of learning. The Gretl output file and the data set are attached below. Sorry, I have a german version :). Thanks again for your help! Liliya &quot;gretl-users-request(a)lists.wfu.edu&quot; <gretl-users-request(a)lists.wfu.edu&gt; schrieb am 18:02 Montag, 25.Mai 2015: Send Gretl-users mailing list submissions to     gretl-users(a)lists.wfu.edu To subscribe or unsubscribe via the World Wide Web, visit     http://lists.wfu.edu/mailman/listinfo/gretl-users or, via email, send a message with subject or body 'help' to     gretl-users-request(a)lists.wfu.edu You can reach the person managing the list at     gretl-users-owner(a)lists.wfu.edu When replying, please edit your Subject line so it is more specific than "Re: Contents of Gretl-users digest..." Today's Topics:   1. Fixed effects model (Liliya Netskar)   2. Re: Fixed effects model (Sven Schreiber) ---------------------------------------------------------------------- Message: 1 Date: Mon, 25 May 2015 11:47:32 +0000 (UTC) From: Liliya Netskar <liliya_netskar(a)yahoo.com&gt; To: &quot;gretl-users(a)lists.wfu.edu&quot; <gretl-users(a)lists.wfu.edu&gt; Subject: [Gretl-users] Fixed effects model Message-ID:     <1847116116.2539701.1432554452728.JavaMail.yahoo(a)mail.yahoo.com&gt; Content-Type: text/plain; charset="utf-8" Hi guys! I have a problem with Gretl panel fixed effects model. I created dummy variables to control for fixed effects (it was a proper way), but Gretl leaves these dummies out. To represent 4 categoeries I used 3 dummies to avoid perfect multicolinearity. In the end I habe a biased result because of the omitted dummies. Is there a solution for the problem? Thanks a lot in advance! Liliya -------------- next part -------------- An HTML attachment was scrubbed... URL: <http://lists.wfu.edu/pipermail/gretl-users/attachments/20150525/50c9591f/... ------------------------------ Message: 2 Date: Mon, 25 May 2015 14:17:43 +0200 From: Sven Schreiber <svetosch(a)gmx.net&gt; To: gretl-users(a)lists.wfu.edu Subject: Re: [Gretl-users] Fixed effects model Message-ID: <556312E7.7080101(a)gmx.net&gt; Content-Type: text/plain; charset=windows-1252; format=flowed Am 25.05.2015 um 13:47 schrieb Liliya Netskar: Gretl typically leaves out regressors (including dummies) for a reason -- usually collinearity. In the case of panel fixed effects one immediately thinks of time-invariant regressors as a reason, but this is of course just speculation without knowing any details. Please show us the estimation output. cheers, sven ------------------------------ _______________________________________________ Gretl-users mailing list Gretl-users(a)lists.wfu.edu http://lists.wfu.edu/mailman/listinfo/gretl-users End of Gretl-users Digest, Vol 100, Issue 20 ********************************************