Dear Sir or Madam,
I saw the answers about panel data on stata website. I have one question
about the random effects model.
I am using two step panel data model ( xtivreg ), however, fixed effect
model will drop some time invariant variables in first stage. therefore I
only can choose random effect model. The RE model has an assumption that:
the random effects are uncorrelated with regressors. How can I test this
assumption except hausman test? If the hausman test reject the hypothesis,
does that mean the random effects is correlated with regressors?
Thanks your reply.
Tao
University of Bath
*
* For searches and help try:
* http://www.stata.com/support/faqs/res/findit.html
* http://www.stata.com/support/statalist/faq
* http://www.ats.ucla.edu/stat/stata/
