Panel Data - Memorial University of Newfoundland
Panel Data - Memorial University of Newfoundland
Panel Data - Memorial University of Newfoundland
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β =β+u<br />
1i<br />
1<br />
i<br />
Average intercept<br />
(15.20)<br />
( ) ( )<br />
2<br />
= 0, cov , = 0, var ( ) = σ<br />
E u u u u<br />
i i j i u<br />
(15.21)<br />
y =β +β x +β x + e<br />
it 1i 2 2it 3 3it it<br />
Randomness <strong>of</strong> the intercept<br />
( )<br />
= β + u +β x +β x + e<br />
1 i 2 2it 3 3it it<br />
Usual error<br />
(15.22)<br />
Principles <strong>of</strong> Econometrics, 3rd Edition<br />
Slide 15-38