Dear Forum Fellows
I would appreciate if you please give me your expert opinion on one of the problem I am facing.
I have 9 Independent variables, 7 countries, 24 years panel data.
While using LM test to decide in between OLS or Random effect model, I am getting prob-value 1.0000....signalling to choose OLS WHEREAS I am also getting hausman test prob-value as 0 which signifies that Fixed effect is preferred.....
In such case, i am not getting what i have done wrong bcoz of which i am getting contrasting result
Looking for your best comments. appreciate if you please explain how I should I proceed further.
These are test results
I would appreciate if you please give me your expert opinion on one of the problem I am facing.
I have 9 Independent variables, 7 countries, 24 years panel data.
While using LM test to decide in between OLS or Random effect model, I am getting prob-value 1.0000....signalling to choose OLS WHEREAS I am also getting hausman test prob-value as 0 which signifies that Fixed effect is preferred.....
In such case, i am not getting what i have done wrong bcoz of which i am getting contrasting result
Looking for your best comments. appreciate if you please explain how I should I proceed further.
These are test results
| xttest0 | |||||
| Breusch and Pagan Lagrangian multiplier test for random effects | |||||
| fdii[countrycode,t] = Xb + u[countrycode] + e[countrycode,t] | |||||
| Estimated results: | |||||
| | Var sd = sqrt(Var) | |||||
| ---------+----------------------------- | |||||
| fdii | 1.981186 1.407546 | |||||
| e | .7544939 .8686161 | |||||
| u | 0 0 | |||||
| Test: Var(u) = 0 | |||||
| chibar2(01) = 0.00 | |||||
| Prob > chibar2 = 1.0000 | |||||
| Hausman (1978) specification test | ||
| Coef. | ||
| Chi-square test value | -14.503 | |
| P-value | 1 | |
| AFTER SIGMAMORE CORRECTION | ||
| Hausman (1978) specification test | ||
| Coef. | ||
| Chi-square test value | 74.084 | |
| P-value | 0 | |
