Question
Because fixed effects allows arbitrary correlation between and the, while random effects does not, FE is widely thought to be a more convincing tool for
Because fixed effects allows arbitrary correlation between and the, while random effects does not, FE is widely thought to be a more convincing tool for estimating ceteris paribus effects. Let's say you are concerned about the correlation between and the key explanatory variable that is constant over time. Then what is your modeling strategy? Use FE or RE?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Stochastic Calculus And Applications
Authors: Samuel N Cohen, Robert J Elliott
2nd Edition
1493928678, 9781493928675
