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Re: st: Hausman Test Problems


From   Muhammad Anees <[email protected]>
To   [email protected]
Subject   Re: st: Hausman Test Problems
Date   Mon, 2 May 2011 14:47:05 +0500

Yes, John! I did the same thing. When done the following or

""" xtreg priceclose eps bookvalue, re
xtoverid
di r(j)
est store re
xtreg priceclose eps bookvalue, fe
est store fe
hausman fe re, sigmaless
di r(chi2)
or, seperating from above lines:
xtreg priceclose eps bookvalue, re cluster(id)
xtoverid"""
both do-files with similar results given below
Does it mean that my choice of Fixed effects will work? Or I need
something different to interptrete the results.

Test of overidentifying restrictions: fixed vs random effects
Cross-section time-series model: xtreg re  robust cluster(id)
Sargan-Hansen statistic  17.118  Chi-sq(2)    P-value = 0.0002


On 2 May 2011 14:08, John Antonakis <[email protected]> wrote:
> Try the userwritten command -xtoverid-.  That should do it.  After you run
> your model,
>
> xtreg y x1-x10, re
>
> Just type -xtoverid- afterwards. This words after a robust or cluster robust
> vce too.
>
> HTH,
> John.
>
> __________________________________________
>
> Prof. John Antonakis
> Faculty of Business and Economics
> Department of Organizational Behavior
> University of Lausanne
> Internef #618
> CH-1015 Lausanne-Dorigny
> Switzerland
> Tel ++41 (0)21 692-3438
> Fax ++41 (0)21 692-3305
> http://www.hec.unil.ch/people/jantonakis
>
> Associate Editor
> The Leadership Quarterly
> __________________________________________
>
>
> On 02.05.2011 06:12, Muhammad Anees wrote:
>>
>> Dear All!
>>
>> I have run a panel data regression and selection of the random effects
>> or fixed effects using Hausman test. I do not know what is the actual
>> problem with my results. Please could someone help. Why the result for
>> my hausman command results in warning message?
>> the complete results are below:
>>
>>
>> . xtreg priceclose eps bookvalue, fe
>>
>> Fixed-effects (within) regression               Number of obs      =
>> 850
>> Group variable: id                              Number of groups   =
>> 170
>>
>> R-sq:  within  = 0.1160                         Obs per group: min =
>>   5
>> between = 0.5266                                        avg =       5.0
>> overall = 0.4645                                        max =         5
>>
>> F(2,678)           =     44.48
>> corr(u_i, Xb)  = 0.4836                         Prob>  F           =
>>  0.0000
>>
>>
>> priceclose       Coef.   Std. Err.      t    P>t     [95% Conf. Interval]
>>
>> eps    .7770481   .1966364     3.95   0.000     .3909585    1.163138
>> bookvalue    .8653121   .1577343     5.49   0.000     .5556057    1.175018
>> _cons    1.001173   .1176642     8.51   0.000     .7701434    1.232204
>>
>> sigma_u   3.5662704
>> sigma_e   1.5953308
>> rho   .83325562   (fraction of variance due to u_i)
>>
>> F test that all u_i=0:     F(169, 678) =    17.34            Prob>  F =
>> 0.0000
>>
>> .
>> . estimates store fe
>>
>> .
>> . xtreg priceclose eps bookvalue, re
>>
>> Random-effects GLS regression                   Number of obs      =
>> 850
>> Group variable: id                              Number of groups   =
>> 170
>>
>> R-sq:  within  = 0.1159                         Obs per group: min =
>>   5
>> between = 0.5186                                        avg =       5.0
>> overall = 0.4593                                        max =         5
>>
>> Random effects u_i ~ Gaussian                   Wald chi2(2)       =
>>  297.79
>> corr(u_i, X)       = 0 (assumed)                Prob>  chi2        =
>>  0.0000
>>
>>
>> priceclose       Coef.   Std. Err.      z    P>z     [95% Conf. Interval]
>>
>> eps    1.113035   .2084971     5.34   0.000     .7043883    1.521682
>> bookvalue    1.394302   .1196459    11.65   0.000     1.159801    1.628804
>> _cons    .5629992   .2070207     2.72   0.007     .1572462    .9687522
>>
>> sigma_u   2.1242726
>> sigma_e   1.5953308
>> rho   .63938518   (fraction of variance due to u_i)
>>
>>
>> .
>> . estimates store re
>>
>> .
>> . hausman fe re
>>
>> ---- Coefficients ----
>> (b)          (B)            (b-B)     sqrt(diag(V_b-V_B))
>> fe           re         Difference          S.E.
>>
>> eps     .7770481     1.113035       -.3359869               .
>> bookvalue     .8653121     1.394302       -.5289903         .102786
>>
>> b = consistent under Ho and Ha; obtained from xtreg
>> B = inconsistent under Ha, efficient under Ho; obtained from xtreg
>>
>> Test:  Ho:  difference in coefficients not systematic
>>
>> chi2(2) = (b-B)'[(V_b-V_B)^(-1)](b-B)
>> =   -15.59    chi2<0 ==>  model fitted on these
>> data fails to meet the asymptotic
>> assumptions of the Hausman test;
>> see suest for a generalized test
>>
>>
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-- 
Muhammad Anees
MSc in Economics
The University of Sheffield
United Kingdom

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