Panel Data - Memorial University of Newfoundland
Panel Data - Memorial University of Newfoundland
Panel Data - Memorial University of Newfoundland
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• GRETL also shows the Hausman test <strong>of</strong> the null<br />
hypothesis that the random effects are indeed<br />
random.<br />
• If they are random, then they should not be correlated<br />
with any <strong>of</strong> your other regressors.<br />
• If they are correlated with other regressors, then you<br />
should use the FE estimator to obtain consistent<br />
parameter estimates <strong>of</strong> your slopes<br />
Principles <strong>of</strong> Econometrics, 3rd Edition