Dear all,
I am trying to decide whether to use fixed or random effects model. In doing
that I ran both models and then the hausman test. The results fro mthe test
suggest that fixed effects might be superior (prob>chi sq is smaller than
0.05) but does that make sense substantively? I am studying the determinants
of voter turnout and my data consists of 550+ observation and 77 countries.
Both models (FE and RE) do not provide different signs or significance, but
the R-sq. stat differs quite a bit (3 vs 29%). Any suggestions and advice is
welcome.
This is the hausman test output
:
hausman fixed random
---- Coefficients ----
| (b) (B) (b-B) sqrt(diag(V_b-V_B))
| fixed random Difference S.E.
-------------+----------------------------------------------------------------
stability | .8612319 .5429065 .3183254 .130613
PRHetero | 17.92476 16.23667 1.688093 4.88696
age | -.1873375 -.1401071 -.0472304 .0171591
gdp | .0858235 .0801026 .0057209 .0105805
mandatory | 8.434539 6.504805 1.929734 3.078364
pr | -7.481201 -6.438582 -1.042618 1.307992
elf | -18.81114 -21.91486 3.103719 10.77812
------------------------------------------------------------------------------
b = consistent under Ho and Ha; obtained from xtreg
B = inconsistent under Ha, efficient under Ho; obtained from xtreg
Test: Ho: difference in coefficients not systematic
chi2(7) = (b-B)'[(V_b-V_B)^(-1)](b-B)
= 25.94
Prob>chi2 = 0.0005
I appreciate your help.
Regards,
Ekaterina
--
Ekaterina R. Rashkova
Graduate Student
Department of Political Science
Washington University
Campus Box 1063
One Brookings Drive
St. Louis, MO 63130
(314) 935-5856 (Fax)
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