Regression modelEconometrics / time series
Fixed Effects Model
The fixed effects (FE) model is the workhorse estimator for panel data when unobserved unit-specific characteristics are suspected to correlate with the regressors. By absorbing each entity's time-invariant heterogeneity into a separate intercept, FE isolates the causal effect of within-unit variation and eliminates omitted-variable bias from time-constant confounders.
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Sources
- Baltagi, B. H. (2021). Econometric Analysis of Panel Data (6th ed.). Springer. ISBN: 978-3030538002
- Mundlak, Y. (1978). On the pooling of time series and cross section data. Econometrica, 46(1), 69–85. DOI: 10.2307/1913646 ↗
Related methods
Referenced by
Arellano-Bond GMM estimatorBayesian Fixed Effects ModelBayesian Hausman TestBayesian Panel Data AnalysisDifference GMMDynamic Panel Data ModelFourier Fixed Effects ModelNonlinear Fixed Effects ModelNonlinear Random Effects ModelPanel AR modelPanel Data AnalysisPanel Fixed Effects ModelPanel Hausman TestPanel OLSPanel Random Effects ModelPanel-based Causal-Comparative ResearchPanel-based Confirmatory ResearchPanel-based Observational Quantitative ResearchRobust Fixed Effects ModelRobust Panel Data AnalysisStructural Break Fixed Effects ModelStructural Break Hausman TestTime-varying parameter random effects model