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st: comparing loglikelihoods of ols dummy regression model vs random


From   Maarten buis <[email protected]>
To   stata list <[email protected]>
Subject   st: comparing loglikelihoods of ols dummy regression model vs random
Date   Mon, 27 Apr 2009 15:15:15 +0000 (GMT)

--- Marcelo Jenny wrote:
> Could somebody please point me to the reason why a bare model with
> dummy variables does better in terms of the loglikelihood of the
> model than the respective random intercept model?

In your case the dummy model uses 8 parameters to capture the group 
effects, while the random effects model only uses 1 parameter to
capture the group effect. So, it is no surprise that the dummy 
model fits better.

-- Maarten

-----------------------------------------
Maarten L. Buis
Institut fuer Soziologie
Universitaet Tuebingen
Wilhelmstrasse 36
72074 Tuebingen
Germany

http://home.fsw.vu.nl/m.buis/
-----------------------------------------


      

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