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st: Panel data: Why does adding group means test for random effects?
I'm new to the list, but I'm glad I found you all.
I'm testing for random vs. fixed effects, and I've read that another
way to do this is to add group means to the regression. I don't fully
understand why the coefficient of the group means will be larger if
there is correlation between the variable and the effect.
If you understand this, please help! Thanks.
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