Consistently estimates coefficients even if unobserved individual effects are correlated with the independent variables.
: The numeric variable identifying the cross-sectional unit. timevar : The numeric variable identifying the time period.
Panel data is typically preferred in , where each row represents a unique combination of entity and time, rather than wide format , where multiple observations for one entity exist in a single row. stata panel data
Measures how much units deviate from their own average over time. If within variance is zero, the variable is time-invariant (e.g., race, birth country). Data Visualization: xtline
* Load example dataset webuse nlswork, clear * Set panel data structure (id is panel variable, year is time) xtset idcode year Use code with caution. Panel data is typically preferred in , where
Assumes unobserved individual effects are uncorrelated with the regressors. xtreg y x1 x2, re Use code with caution. Copied to clipboard Choosing Models: Hausman test
The Hausman test evaluates whether the unique error terms are correlated with the regressors. The null hypothesis states that the Random Effects estimator is efficient and consistent. To run the Hausman test in Stata: Data Visualization: xtline * Load example dataset webuse
merge 1:1 id year using another_panel.dta