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From |
emanuele canegrati <emanuele.canegrati@hotmail.it> |

To |
<statalist@hsphsun2.harvard.edu> |

Subject |
RE: st: a simple panel data question: FE and RE |

Date |
Sat, 2 Aug 2008 17:49:41 +0200 |

Well the temperature in Milan is around 37 today. That's why I see more "a" than necessary! Sorry Marteen for my English-isation of your name! Cheers, Emanuele > Date: Sat, 2 Aug 2008 13:44:21 +0200 > From: martin.weiss@uni-tuebingen.de > To: statalist@hsphsun2.harvard.edu > Subject: RE: st: a simple panel data question: FE and RE > > Maybe one day, email will come with pictures: then statalisters will > be able to distinguish between Maarten and Martin :-) > > Quoting emanuele canegrati : > >> >> As Martin said the best way is to imagine a model written in the >> following fashion: >> >> >> >> >> >> Y = X*Beta + Z*mu + v >> >> >> >> >> >> where Z is the matrix of individual dummies of NTxT. So in your case >> you will obtain estimates of mu(1) and mu(2) coefficients. >> Individual specific effect are unobservable (you don't see them in >> the regression) and vary across individuals. If you neglet to >> consider fixed effects as in the previous expression you obtain a >> biased and inconsistent estimation of the relation between Y and X. >> With FE option STATA produces automatically the outcome of an F test >> which tests the joint significance of individual dummies. This can >> help you to better understand which is the actual relation between X >> and Y. >> >> >> >> >> >> Hope this help. >> >> >> >> >> >> Emanuele Canegrati >> >>> Date: Fri, 1 Aug 2008 23:03:56 +0100 >>> From: maartenbuis@yahoo.co.uk >>> Subject: Re: st: a simple panel data question: FE and RE >>> To: statalist@hsphsun2.harvard.edu >>> >>> One way of thinking about fixed effects (in a linear model) is that a >>> dummy is added for each unit (minus one reference unit). These dummies >>> absorb all the observed and unobserved differences between the units, >>> so it does take the across variation into account. However, you can no >>> longer describe what a unit level variable, like the average value of >>> X, does to Y. In a random effects model you can describe the effects of >>> unit level variables, but at a price: you now have to make a number of >>> assumptions you did not have to make with a fixed effects model. The >>> assumption that people like least is the assumption that the random >>> effect is uncorrelated with the observed variables. >>> >>> -- Maarten >>> >>> --- yjh jsh wrote: >>> >>>> Dear all, >>>> I have a newbie question here. sorry for this. >>>> >>>> I have a panel data with variable Y and X for two units for example. >>>> unit year X Y >>>> 1 1991 1 20 >>>> 1 1992 2 19 >>>> 1 1993 3 21 >>>> 2 1991 10 40 >>>> 2 1992 11 40 >>>> 2 1993 11 39 >>>> >>>> That is, there is a larger cross variation than within variation >>>> >>>> As i understand, FE only address the variation within units. So, if I >>>> use FE, i will not find a significant relationship between x and y >>>> based on the nature of the hypothectical data. >>>> but this finding does not take into account the fact Y takes higher >>>> vaue in unit 2 because x takes higher value in that unit. That is, fe >>>> failed to represent the across-variation. >>>> >>>> Is my understanding correct? >>>> >>>> Sorry for this simple question. >>>> >>>> best >>>> * >>>> * For searches and help try: >>>> * http://www.stata.com/help.cgi?search >>>> * http://www.stata.com/support/statalist/faq >>>> * http://www.ats.ucla.edu/stat/stata/ >>>> >>> >>> >>> ----------------------------------------- >>> Maarten L. Buis >>> Department of Social Research Methodology >>> Vrije Universiteit Amsterdam >>> Boelelaan 1081 >>> 1081 HV Amsterdam >>> The Netherlands >>> >>> visiting address: >>> Buitenveldertselaan 3 (Metropolitan), room Z434 >>> >>> +31 20 5986715 >>> >>> http://home.fsw.vu.nl/m.buis/ >>> ----------------------------------------- >>> >>> >>> __________________________________________________________ >>> Not happy with your email address?. >>> Get the one you really want - millions of new email addresses >>> available now at Yahoo! http://uk.docs.yahoo.com/ymail/new.html >>> * >>> * For searches and help try: >>> * http://www.stata.com/help.cgi?search >>> * http://www.stata.com/support/statalist/faq >>> * http://www.ats.ucla.edu/stat/stata/ >> >> _________________________________________________________________ >> Explore the seven wonders of the world >> http://search.msn.com/results.aspx?q=7+wonders+world&mkt=en-US&form=QBRE >> * >> * For searches and help try: >> * http://www.stata.com/help.cgi?search >> * http://www.stata.com/support/statalist/faq >> * http://www.ats.ucla.edu/stat/stata/ >> > > > > > * > * For searches and help try: > * http://www.stata.com/help.cgi?search > * http://www.stata.com/support/statalist/faq > * http://www.ats.ucla.edu/stat/stata/ _________________________________________________________________ Connect to the next generation of MSN Messenger http://imagine-msn.com/messenger/launch80/default.aspx?locale=en-us&source=wlmailtagline * * For searches and help try: * http://www.stata.com/help.cgi?search * http://www.stata.com/support/statalist/faq * http://www.ats.ucla.edu/stat/stata/

**References**:**st: a simple panel data question: FE and RE***From:*"yjh jsh" <jshyjh1@gmail.com>

**Re: st: a simple panel data question: FE and RE***From:*Maarten buis <maartenbuis@yahoo.co.uk>

**RE: st: a simple panel data question: FE and RE***From:*emanuele canegrati <emanuele.canegrati@hotmail.it>

**RE: st: a simple panel data question: FE and RE***From:*Martin Weiss <martin.weiss@uni-tuebingen.de>

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