Between effects, Random Effects and Hybrid Models

[Ioanna Malkogianni]

Hello everyone,

I am currently working with panel data. I have a time invariant variable and as I read in the literature, all time invariant variables are omitted in FE models.

So, I have to try a Random Effect model or a Between Effect or a Hybrid Model.

What are the differences between Random Effect and Between Effect? And what is the Hybrid Model?

Thank you very much in advance

Best regards,
Ioanna

[Rich Goldstein]

you might want to start by reading the following FAQ: http://www.stata.com/support/faqs/st...een-estimator/

I don't know what you mean by a "Hybrid" model - can you provide a citation?

[Carlo Lazzaro]

Ioanna:
welcome to the list.
Some remarks about your post:
-I'm not clear whether you have other predictors beyond the time-invariant one. If this were the case, the fact that -fe- specification washes out the time-invariant predictor may not hamper that much your regression (unless you're strongly interested in estimating its coefficient).
--hausman- test can give you some clue about choosing between -fe- and -re-;
--be- speciication is seldom used;
- the final part of your question is so broad that it should require a comprehensive description of all the backbones of panel data econometrics, This cannot be done on this list, although the -xt- section of Stata .pdf manual is a valuable place to start off.
Besides, I would point you out to any decent panel data econometrics textbooks (please, see http://www.stata.com/bookstore/).
As a closing-out remark, it is highly advisable to be aware of what you type before invoking one of the wonderful -xt-prefixed commands in Stata.

PS. crossed in the cyberspace with Rich's helpuf advice.

[Sebastian Kripfganz]

In an earlier topic, I have posted a link list to various Statalist discussions about time-invariant variables in panel models that might be of help.

Regarding the "hybrid model", I recommend to read the following article:
Schunck, R. (2013). Within and between estimates in random-effects models: Advantages and drawbacks of correlated random effects and hybrid models. The Stata Journal 13(1), 65-76.