to listers:
i am trying to apply -xthausman- to test for the
random effects assumption but everytime i do that this
error comes up:
Estimate of sigma_u = 0, random-effects estimator has
degenerated to pooled
OLS and the Wald test from xthausman may not be
appropriate. See [R] hausman
for a more general implementation of the Hausman test.
r(459);
i think it has something to do with the fact that
sigma_u = 0 when i apply the -xtreg, re- to my model?
what does sigma_u = 0 means anyway? and what do you
suggest i should do instead if hausman test wouldnt
run? how would i know which among fixed and random
effects is better to use?
any help would be greatly appreciated!
thank you v.much!
-shels-
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