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Diagnostic Tests for Panel Regressions in Stata

Overview When performing a panel regression analysis in Stata, additional diagnostic tests are run to detect potential problems with residuals and model specification. In order to rely on the estimated coefficients and consider them accurate representations of true parameters, it is important that the assumptions of linear regressions formulated in the Gauss-Markov theorem should be…

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Panel Data Analysis Using Stata

To conduct a panel regression analysis in Stata, the following steps should be done. First, a panel dataset should be uploaded into Stata using the command import excel <address> firstrow where excel is the software in which the dataset is created, and firstrow is the command that lets Stata store the first row as variable…

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Random and Fixed Effect Models in Panel Regression

Random and Fixed Effect Models

When performing a panel regression analysis, the problem of choosing an appropriate model specification arises. A pooled OLS regression assumes that the differences in data between cross-sections and time periods are insignificant so that they can be ignored and treated using a simple OLS regression. However, in real life, distinctions between cross-sections and between time…

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