# Questions tagged [fixed-effects-model]

In biostatistics, fixed-effects may mean population-average effects. In econometrics, fixed-effects may represent the observed quantities in terms of explanatory variables that are treated as if the quantities were non-random.

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### Subtracting fixed effect term for visualization

Suppose that I run a fixed effect model $$y_{ij}=\beta_0+\beta_1x_{ij}+d_i+\epsilon_{ij}$$ where $d_i$ is the fixed effect model for group $i$. Now that I want to show the data, is it appropriate ...
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### R | Large-Sample Fixed-Effects Interaction using plm

How can I model Interactions with fixed effects for a large sample using plm? I have a panel data set with > 100,000 observations and I am trying to model a dummy-interaction with one of two fixed ...
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### Fixed effects gamma estimator?

Question 18.12 in Wooldridge's Econometric Analysis of Cross Section and Panel Data describes a "fixed effects gamma estimator", which appears to be analogous to a fixed effects Poisson estimator, ...
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### Is it possible to see in an equation if fixed effects are used in cross section regression?

I need to find out if multilateral resistance terms are accounted in an Gravity Equation, so Anderson and Wincoop (2003) says one method is to use Country Fixed effects. So is it possible to see in ...
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### Is it necessary to convert variables into real terms when using time fixed effects?

I have a panel dataset spanning 5 years. I'm interested in the impact a independent variable has on a dependent variable whose value is measured in dollars while controlling for a variety of factors. ...
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### Regression: fixed effects vs. random effects vs. first differences?

I'm learning econometrics and I'm stumped with a textbook problem. Use the JTRAIN dataset (which provides information on manufacturing plants in Michigan from the years: 1987, 1988 and 1989) to ...
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### Can a fixed effect model be used for making predictions?

Im new to panel data, and I am struggling to figure out if paneldata regressions can be used for making predictions outside of the sample to which it was generated. Thanks, Mathias
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### Appropriate econometric model for repeated cross sectionals

This is a question about repeated cross sectional and panel data analysis. I have scoured through related questions on this site and Stack Overflow but havenāt quite found what I am looking for. Data ...
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### Predicting Outcome Variable for out-of-sample Panel data R

I have data for population, income and price of cheese in 139 countries from 2007 to 2017. The objective is to find the price of bread in a new country X where I have data on the population and ...
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### Alternative to DiD estimtion

I am doing a policy evaluation and wanted to do so with a Difference-in-Differences regression. There is an assumption about common trend, where the treatment group and the control group would follow ...
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### Dummy Variable Control for Inflationary Time Period

Suppose I estimated a panel data model (U.S. states observed across 10 years) with a dummy variable to control for an inflationary period like 1973-1974 across all states. Is it possible to include ...
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### Running a Panel Regression in R - What is the “Between” model?

I'm running regressions on an unbalanced panel dataset. I've ran panel regressions in other software, but this is my first time in R. I have a question about the "between" model in the PLM ...
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### Panel data ID and time level fixed effects with propensity score matching possible?

I have about 15000 observations on long term care centers per year, for a period of 10 years. My independent variable is binary and the outcome variable is continuous. I have performed ID and year ...
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### Dynamic Panel Data Model With Mulitway Fixed Effects

I am considering the following model: $$y_{it}=\rho y_{it-1}+\beta x_{it}+\delta_i+\delta_{rt}+\epsilon_{it}.\tag{1}$$ Here $y$ is an outcome variable, $x$ our variable of interest, $\delta_i$ denotes ...
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### Two-ways random effects with unbalanced panel data in R

I am currently working with a panel data set in R. So far I specified a fixed effects model with two fixed effects (company/individual and time). Now I want to justify my choice by performing Hausman ...
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### Comparison of coefficients in fixed effects vs. non fixed-effects regressions

I recently came across a paper that runs pairs of regressions, in which one regression includes unit fixed effects and the other regression does not include unit fixed effects. The paper then ...
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### Time fixed effect dropped in regression with unit-invariant variable

I am estimating a model with country and time fixed effects (years). Among the regressors I have a country-invariant variable (dollar oil price) which is of interest. I have noticed that some year ...
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### Fixed effects model with explanatory variable that is a function of a fixed effect-level observable

I have a question about the interpretation of parameters in a fixed effect specification, sorry that the context is a bit specific. In the data/working paper that I am looking at, there are a number ...
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### Interpretation question: non-normality of fixed effects

In my study I am looking for individuals outperforming other individuals (panel data set). I ran a fixed effects regressions with dummies for all individuals and tested significant for individual ...
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### Interpretation of interaction in presence of squared terms

I am running a fixed effects model with two independent variables, their quadratic terms, and the interaction of the two variables. IV = b0 + b1*X + b2*Y + b3*X_sq + b4*Y_sq + b5*XY How do I ...
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### Picking models to explain between-group and over time variation of panel data

I have a four-period panel dataset with quite a few variables in country aggregates. I am trying to answer two questions: Firstly, I need to identify variables which do the most to explain variation ...
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### Interpreting DD estimates in terms of their economic magnitude

I'm currently doing the statistical part of my final thesis and I am having troubles with correctly interpreting my regressions results. The models I am using (with the plm package in R) are pretty ...
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### Can I use Fixed Effects models for a time series (not panel) dataset?

I'm working with a random effects model for a panel dataset for a number of retailers and their daily sales. Since I am trying to infer the effect of an interaction between two independent variables ...
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### Robust standard errors fixed effects and first differencing

Suppose that we have an unobserved effects model: $y_{it}=\beta_0+\beta_1 x_{it}+a_i+u_{it}$ for $t=1,2$. When we have two time periods for panel data, I read that fixed effects estimation and first ...
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### Should I include control variables in my model even if I am using unit- and time-fixed effects for a panel dataset?

I am assessing the relationship between a state law and a health outcome's incidence in a given state and year using multiple years of data. If I use within and between fixed effects (creating a dummy ...
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### Robustness checks for Pooled OLS, Fixed Effects, and GMM

I am investigating conditional convergence across Indian states using panel data. I include the state name, year, SDP per capita, and a number of conditioning variables such as Public Expenditure, ...
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### First Difference Estimator and Levels mixed up

I read a paper which used the first difference estimator in an empirical analysis and while reading, some questions arose and that is why I would like to ask you for help. At first the authors ...
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### Robust fixed model

I have a question when I apply fixed and random model, then hausman test, the results show that the appropriate one is fixed model based on hausman test, then I want to check the heterocedasticity for ...
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### In SAS, does the using the GLM statement ABSORB invalidate the standard errors of the parameter estimates?

SAS provides a handy tool for handling panel models with a large number of groups by 'absorbing' those groups (PROC GLM; ABSORB). My understanding is that it factors the effect of the absorbed ...
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### Significant difference of nutrients among soil types with lme. Is soil depth a fixed effect?

I have a soil nutrient dataset of 60 plots from three different soil types divided per three depths. I did a one way ANOVA for every nutrient at the first depth and I got nice results in which I can ...
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### Time invariant variables for banks

I'm looking to build a fixed effects or random effects model. The aim is to find the impact of non-performing loan ratio (NPLR) and capital adequacy ratio (CAR) on return on equity (ROE) for banks. ...
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### Choice of fixed effects versus random effects model

I have a question about the use of fixed versus random effects models. Let us consider the following example for motivation: Suppose we are interested in the relationship between the performance of ...
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### Common unit root or individual unit root

Is it acceptable to estimate panel equation with fixed effects when the common unit root is rejected, but individual unit root tests aren`t rejected ?
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### Determining type of effects in a mixed effect model

I am trying to fit a nonlinear mixed effects model, and here is my train of thought. So my model (I'm thinking) should be: $Y_{ij} = f(\theta_i, t_{ij}) + \epsilon_{ij}$ where $f(\theta_i, t_{ij})$ ...
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### When autocorrelation is present, but no evidence of the need of fixed effect is found, can one just use random effects or clustered std errors?

Suppose that you have a cross-sectional panel-data, in the format of country-year and estimate a given model specification m. An example in R (although the question ...
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### Sharing of information and borrowing of strength. What models are there

I am currently working on identifying all the methods that have been implemented in all kinds of disciplines in order to borrow strength. If you have ever used, or came across such methods i would be ...
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### Dummy variables, interaction terms and panel data fixed-effects model

I am interested in incorporating time-invariant variables to a fixed-effects panel data model. As we know, the coefficient corresponding to the time-invariant variable will be dropped, because of the ...
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### Variables which only changes over time in fixed effects

Suppose we have a model which relates state level consumption of alcohol to state level hospital expenditures:  \text{Hospital expenditure}_{i,t} = \beta_1 \text{alcohol consumption}_{i,t} + \dotso ...
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### Run fixed effect and logit regression on a national survey that need to be “weighted” in R?

I am a beginner user of R. I am using a national survey to test what variables influence the participation in complementary pensions (the participation in complementary pension is voluntary in my ...
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### How can I apply weights to the cross-sectional dimension in a fixed effect panel model?

I have a balanced panel dataset in which I have observations for N countries across T quarters. I use a fixed effect model to explore the relationship between my variables. Since all countries have ...
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### Time fixed effect with a single country

pvexp.result1 <- plm(export ~ partycongress + inflation + crudepetrol + lngdp + lngrowth + lnlcratio, data=private.export, index="year", model="within", effect="time") summary(pvexp.result1) I ...
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### Small panel - Deforestation

I am trying to empirically test the relationship between certain drivers of deforestation (independent variables) and deforestation in a small developing country. I have data for 4 provinces and for ...