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10. Fixed effects model with three time periods Consider the following general xed effects model for use with a panel data set with three time
10. Fixed effects model with three time periods Consider the following general xed effects model for use with a panel data set with three time periods (T = 3): ya = 61 + 62d2: + 63 d3: + md + + kxmz + w: where, for t = 1, 2, 3, and time period 1 is the base year: 3);, = value of dependent variable y for i, in year I, in pounds 02, =1 in the second time period (I = 2), and =0 otherwise 03, =1 in the third time period {I = 3), and =0 otherwise 1;.) , , 1m: = value of explanatory variables for individual 1' at time I var = composite error consisting of the unobserved, time-constant effect (1;) and the idiosyncratic error (m) If there are 200 cross-sectional units in your balanced panel data set, then the total number of observations you have in your data set is E- For the third time period (I = 3), the intercept is V . Which of the following would cause pooled 0L5 estimation of the model to yield biased and consistent estimators? Check all that apply. Cl Measurement error in any explanatory variable under the classical errors in variables (CEV) assumption D Dmitting a time-varying variable that inuences y and is correlated with one of the explanatory variables D a,- being uncorrelated with x\
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