Hi Listers,
I have run an xtreg with 3 explanatary variables.
the result shows that, there are within and between variations, whereas the
sigma_u is zero.
can you tell me why?
thanks
xtreg invest l_tobinq cash nta
Random-effects GLS regression Number of obs =
1680
Group variable (i) : i Number of groups =
280
R-sq: within = 0.0862 Obs per group: min =
6
between = 0.5242 avg =
6.0
overall = 0.1601 max =
6
Random effects u_i ~ Gaussian Wald chi2(3) =
319.48
corr(u_i, X) = 0 (assumed) Prob > chi2 =
0.0000
----------------------------------------------------------------------------
--
invest | Coef. Std. Err. z P>|z| [95% Conf.
Interval]
-------------+--------------------------------------------------------------
--
l_tobinq | .1258068 .0586902 2.14 0.032 .0107761
.2408374
cash | .1442353 .008403 17.16 0.000 .1277656
.160705
nta | -.1554083 .0710843 -2.19
0.029 -.294731 -.0160855
_cons | 3.458639 1.513534 2.29 0.022 .4921665
6.425112
-------------+--------------------------------------------------------------
--
sigma_u | 0
sigma_e | 2.6171947
rho | 0 (fraction of variance due to u_i)
----------------------------------------------------------------------------
--
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