Just started studying econometrics and need help

[Mankit Zegall]

Dear colleagues,
I have just started studying econometrics from this March and I am stuck with this question. It is the exam I took last week which I failed to get the results.
I am trying to learn from the right results.
After I get the commands and the results. I will do the interpretation and ask for you advice again.

Thanks alot

[Carlo Lazzaro]

Mankit:
please consider that maintaining a help line dedicated to class(home)-works is out of the scope of this forum.
You seem to have a panel data issue.
This topic is widely covered under -xt- and related entries in Stata 13.1 .pdf manual (and in tons of decent econometrics textbooks).
Hence, I would recommend you to (re-)start out from those sources and then come back to the list, reporting what you tyoed and what Stata gave you back (as per FAQ).

[Christos Makridis]

There's a great stata help page related to what Carlo mentioned here: http://www.stata.com/support/faqs/st...g-and-effects/

You will learn a lot just reading a wikipedia page about it too. Fixed effects demeans the data so that you only look at year to year changes. Random effects generally assumes there's some idiosyncratic taste component that's uncorrelated with the right hand side variables. At least in my work, that assumption always fails!

[Carlo Lazzaro]

Christos touched on a relevant issue Mankit may be interested in.
Stata offers the -hausman-test for helping you choosing between fixed vs random effect specification in panel data analysis (see -help hausman-).