binary - Stata: Dummy variable as instrument in xtivreg or xtivreg2? -


i trying estimate price elasticity of electricity demand time series data. in order handle endogeneity of price, running panel iv regression.

treatment groups (4) , 1 control group randomly assigned , assign household pricing program treatment status should highly correlated endogenous variable (log_price). however, due random assignment, treatment status should not correlated log_usage. include weather variables , vector of household variables when not using fixed effects/xtivreg2. treatment dummy variable treatment group vs. control. have tried 2 regressions both give me errors:

(1) xtivreg: 

   xtset id datetime    xtivreg log_usage weather (log_price = i.treatment) household_vars    /// error: matsize small

--> here told matsize small, although have set 800. have large data set maybe impossible?

(2) xtivreg2 

  xtset id datetime   xtivreg2 log_usage weather (log_price = i.treatment), fe   ///error: factor variables not allowed

(3) prefer somehow differentiate between different treatment groups (1-4) created dummies each of groups. control group omitted base group:

  xtset id datetime   xtivreg log_usage weather (log_price = i.group1 i.group2 i.group3 i.group4)   ///error: matsize small

how run xtivreg or xtivreg2 binary variables instrument (or instruments)? how differentiate between form of treatment , control , individual treatment groups (1-4)?


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