Indicate whether the following station is True, False, or Uncertain. Provide an explanation. [True/False/Uncertain] If fixed...

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Indicate whether the following station is True, False, or Uncertain. Provide an explanation. [True/False/Uncertain] If fixed...

Indicate whether the following station is True, False, or Uncertain. Provide an explanation.

[True/False/Uncertain] If fixed effects model and random effects model give very different estimates, then the estimate from the random effects model must be inconsistent.

math Statistics-And-Probability

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Answer 1

Answer #1

As the fix effect model assumption is that individual specific effect is correlated with the independent variables. If the random effects holds then in this case random effects model is more consistent .if the assumption are not hold then it not consistent .then it is inconsistent .

Here the fixed effects model is correlated with independent variable .while random effects model is not .

Therefore random effects model is inconsistent .

Answer: True .

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Answer 2

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