Jian,
Try -xtreg, re sa- instead of -xtreg, re- the additional option takes
care "more carefully" the unbalanced issue using Swamy-Arora method.
Read Method and Formulas in the manual, for version 8:
http://www.stata-press.com/manuals/stata8/xtreg.pdf and version 9:
http://www.stata.com/bookstore/pdf/xtreg.pdf
Rodrigo.
----- Original Message -----
From: "Clive Nicholas" <Clive.Nicholas@newcastle.ac.uk>
To: <statalist@hsphsun2.harvard.edu>
Sent: Saturday, July 15, 2006 4:19 AM
Subject: Re: st: a question on testing for random effect model against fixed
effect model
Jian Zhang wrote:
> I have a question on testing random effect model against fixed effect
> model. Hope that you can help me out. Here is the question;
>
> I am applying random effect model and fixed effect model to an
> unbanlanced panel data (use xtreg, re and xtreg, fe). To test which
> model is more appropriate, I run a hausman test. However, the test
> statistics (the chi square) is negative. This makes hausman testing
> impossible, since chi square cann't be negative. The reason that hausman
> test doesn't work is that the model's error structure does not meet the
> assumptions made for the hausman test.
[...]
Did you run the following:
xtreg ..., fe
est store fixed
xtreg ..., re
hausman fixed ., alleqs constant
If not, see if that works. Works for me every time I have to use it.
CLIVE NICHOLAS |t: 0(044)7903 397793
Politics |e: clive.nicholas@ncl.ac.uk
Newcastle University |http://www.ncl.ac.uk/geps
Whereever you go and whatever you do, just remember this. No matter how
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