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st: how to test between fixed effects or random effects in a xtprobit setting
From
ERIK BERWART ARAYA <[email protected]>
To
[email protected]
Subject
st: how to test between fixed effects or random effects in a xtprobit setting
Date
Thu, 30 Jan 2014 21:30:23 -0300
Dear statalisters,
I am comparing rating actions from issuer-paid agencies with investor-paid agencies.
I have a big panel of rating actions by firm and month with a set of explanatory variables such as firm characteristics, analysts recommendations and big3 related dummies.
My idea is to find why an investor-paid agency exists. Therefore, I im using an xtprobit regression in order to find what variables affects the probability of a firm to being rated by an investor paid CRA.
My question is:
Is this model the right one to answer my question?
How can I know the random effect model is the one to choose and not a fixed effect? Is there a test I can run?
Thank you in advanced for your help.
Erik Berwart
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