FE cannot estimate coefficients for time‑invariant variables (e.g., gender, ethnicity) because those are swept out by the within transformation.
Before diving into models, you need to understand your panel's structure and patterns.
The choice between Fixed Effects (FE) and Random Effects (RE) models shapes how you account for unobserved individual-specific effects ( αialpha sub i stata panel data exclusive
xtset panelvar timevar
Real-world panel data is rarely perfect. Use xtdes to analyze the pattern of your panel and determine if it is balanced or unbalanced. xtdes Use code with caution. Use xtdes to analyze the pattern of your
: Consistent estimates even when omitted time-invariant factors correlate with your regressors.
Before running any analysis, you must declare your dataset as panel data using the Before running any analysis, you must declare your
The traditional hausman command fails if your model violates the assumption of homoscedasticity. To execute a cluster-robust Hausman test, you must use an auxiliary regression approach via the user-written command xtoverid (installable via ssc install xtoverid ).