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  • Interpretation of dummy variables with oaxaca

    Hello everyone,

    I am doing a regression using the following command: oaxaca gaseu l_exp age sq_age ed_dummy* bigregion_dumm* density_dummy*, by (gender) relax pooled. Where the following result is obtained.
    gaseu Coef.
    overall
    group_1 0.3236172
    group_2 0.3327703
    difference -0.0091531
    explained -0.0065566
    unexplained -0.0025965
    explained
    l_exp 0.0039484
    age 0.0156536
    sq_age -0.032553
    ed_dummy1 0.006032
    ed_dummy2 0.0012018
    ed_dummy3 0
    ed_dummy4 0.0015933
    bigregion_dummy1 0.0010965
    bigregion_dummy2 -0.0007488
    bigregion_dummy3 -0.0001077
    bigregion_dummy4 -0.0002835
    bigregion_dummy5 0.0005278
    bigregion_dummy6 -0.0000357
    bigregion_dummy7 0
    density_dummy1 -0.0008125
    density_dummy2 0
    density_dummy3 -0.002069
    unexplained
    l_exp -0.579499
    age 0.2494482
    sq_age -0.136287
    ed_dummy1 -0.006032
    ed_dummy2 0.0021921
    ed_dummy3 0.0013456
    ed_dummy4 0.0034477
    bigregion_dummy1 0.0020264
    bigregion_dummy2 0.0050054
    bigregion_dummy3 0.0007795
    bigregion_dummy4 0.0021616
    bigregion_dummy5 0.0018786
    bigregion_dummy6 0.0004043
    bigregion_dummy7 0
    density_dummy1 0.0224226
    density_dummy2 0.007759
    density_dummy3 0.0113557
    _cons 0.4089945
    My question is: How do I interpret, both for the explained and unexplained part the coef of the dummy variables? Why in the explained part there is always a reference variable but in the unexplained part there is not? Why only for the dummy variable bigregion_dummy* there is a reference variable both in the explained and unexplained part?
    Last edited by Francisca Toro; 19 Jan 2022, 05:22.

  • #2
    The formulas here should help.
    HTML Code:
    https://journals.sagepub.com/doi/pdf/10.1177/1536867X0800800401
    I suspect the 0 coefficients are due to empty groups.

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