Essay
Suppose that in an effort to explain variation in wages,you collect a panel data set with 12,300 total observations over 3 different years with the independent variables as experience,education,married (dummy variable is 1 if married and 0 if not married)and male (dummy variable is 1 if male and 0 if female).
a)How do you estimate a random-effects model for these data? Explain in as much detail as possible.
b)What are the advantages of estimating a random-effects model?
c)What are the drawbacks of estimating a random-effects model for this scenario?
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Q2: Treating each data point in panel data
Q3: Fixed-effects models and first-differenced models<br>A)assume that the
Q4: Random-effects models are<br>A)almost never the appropriate model
Q5: Panel data differs from time-series data in
Q6: First-differenced models are preferable to pooled cross-section
Q8: What is a pooled cross-section model? For
Q9: If there is a pooled cross-section model
Q10: Random-effects models<br>A)assume that the time invariant component
Q11: One can first-difference panel data in a
Q12: Pooled cross-section models are not the preferred