st: Fwd: Panel or pooled data

[Glenn Hoetker <ghoetker@uiuc.edu>]

I have unbalanced panel data and thus need to control for inflated  
standard errors.  Three means of doing so suggest themselves:

xtreg ......, i(id) fe
xtreg ......, i(id) re
xtreg ......., cluster(id)

The discussion under [R] regress demonstrates all three and indicates  
that they are alternative means (unless the assumptions of random  
effects are rejected by a Hausman test, which they are in my case).   
However, it does not discuss what would lead one to prefer one over  
the other--an insight I've not found anywhere else either.

Can anyone inform me as to:

1. What would lead one to prefer one method over the other?
2. Whether there is any test to determine which is preferable?

Many thanks.

Glenn

Glenn Hoetker
Resident Associate, Center for Advanced Study
Faculty Fellow, Academy for Entrepreneurial Leadership
Associate Professor (Business, Law, Institute for Genomic Biology)
University of Illinois at Urbana-Champaign
217-265-4081
ghoetker@uiuc.edu


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