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Re: st: Fixed effects vs. Random effects

From   Justin Smith <>
Subject   Re: st: Fixed effects vs. Random effects
Date   Fri, 21 Jul 2006 12:42:06 -0400

I don't think there is a minimum.  Since it is a within firm (in your
case) regression, you could technically estimate a fixed effects model
with one panel, as long as there is 2 or more time observations within
that panel.

Of course, you want a large number of panels for precise estimation of
the parameters, but there is any magic number on the smallest number of
panels you would need for that.  The more the better.  The size of your
dataset seems plenty large enough to run the model you propose.

Justin Smith

On Fri, 21 Jul 2006 07:56:27 -0700 (PDT)
 ILR School <> wrote:
> Does anyone know where I can find out the minimum
> number of panels one needs to run a fixed-effects
> model?  I have a dataset of 800 firms with only 3 time
> periods using a xtlogit regression model. I am
> currently using a random effects model.
> Thank you,
> Shon R.
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Justin Smith
PhD Candidate
Department of Economics
McMaster University
Phone: (905) 962-0353
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