Panel Data - Memorial University of Newfoundland
Panel Data - Memorial University of Newfoundland
Panel Data - Memorial University of Newfoundland
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• GRETL shows by default this Breusch and Pagan<br />
Lagrangian multiplier test for RE with the null <strong>of</strong> no<br />
variation about a mean (effects are fixed) in the<br />
individual effects.<br />
• This is xttest0 in Stata…<br />
• If H0 is not rejected you can use pooled OLS if the<br />
effects are common and the FE if they differ by<br />
group<br />
Principles <strong>of</strong> Econometrics, 3rd Edition