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Thread: How to do a industry comparison?

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    How to do a industry comparison?




    Hello everyone,

    I am really new to statistical analysis and Stata so I might have a question which could sound too dumb, but I still hope that someone can help me.

    I don't know how to use dummy variables...

    So basically

    I have a list of different returns, each return is from one company. Now I would like to see whether there industry or country of the origin play any role in the return development.

    So Y is the return in column1, then in column 2 I have a 1 for all the return that belongs to country 1, a 0 for rest of the returns. In column 3 I have a 1 for all return that belongs to country 2, a 0 for rest of the returns and so on.

    Can I then do

    reg return country1 country2 country3 ...?
    While all the independent variables are dummy variables?

    Or do I have to include continuous variables? such as size...

    reg return country1 size country 2... or something like this? But what does it tell me then?

    And if only dummy variables are ok, how do I inteprete the result when it says -0.043 as the coeffcient for variable of country 1?
    Does it means that when that all returns for country one has a negative return development of 4.3 percent? Or does that mean that compare to country 2, country 3... and so on, it has a 4.3 percent less return?

    It would be really nice if someone can help me with this question. I will be endlessly greatful!

  2. #2
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    Re: How to do a industry comparison?


    Ok sorry everyone. I have found the answer!
    I should have just googled it a little bit more!

    Thank you anayway!

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