Question
Fixed effect Model and Random effect model.
Answer :
Word Count : 179
| Basis of Difference | Fixed Effect Model (FEM) | Random Effect Model (REM) |
|---|---|---|
| Meaning | Assumes individual-specific effects are fixed and constant over time | Assumes individual-specific effects are random and drawn from a probability distribution |
| Correlation with regressors | Individual effects may be correlated with explanatory variables | Individual effects are assumed to be uncorrelated with explanatory variables |
| Estimation method | Within estimator / Least Squares Dummy Variable (LSDV) method | Generalized Least ____ ______ ______ ________ ________ ____ ______ ____ _________ __________ _____ _________. ________ ______ _______ ________ ___ _______. ________ _______ _____ ___ __________ __________ ______ _______ ___ ______. ____ ______ __________ ___ ____. __________ ______ _________ _____ _______ ________ ____ ______. _________ ______ _____ ________ ________. _____ ____ _______ ____ ________ __________ __________ __________. ___ __________ _________ ____ ______ ______ ___ _______ _________. ______ _________ ________ _____ _______ _________ ____ ___. _______ _________ __________ _______ ____. ___ _______ _____ _______ ___ _____ ________ _____ _________. _____ ____ _____ ___ _________ ________. ________ _________ _________ _______ __________ _______ _____ ____ ___. ___ _____ _____ _________ _____. __________ __________ _____ ________ _____ ________. ___ _________ __________ ____ _______ _____ ______ ______ ____. _________ ________ __________ _____. IGNOU ACADEMY Your IGNOU journey, made easier.
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