Hi to everyone! I have some doubts about the Hausman test. I used it before to choose between fixed and random effects. Now I have the same situation, panel data and fixed effects to estimate, but I noticed some different answer after the test.
1 First of all sometimes Stata tells me the matrix is not positive-define, how I can solve this problem? I read someting about the options sigmamore but the use is not pretty clear.
2 Sometimes test failed since the answer is "model fitted on these data fails to meet the asymptotic assumptions of the Hausman test; see suest for a generalized test". I have to use this different test? How it works? I read also about xtoverid test, it could be an alternative?
3 I use robust clustered stantard error but the Hausman test cannot be performed with them. Could be a problem in the results?
4 When I use the model in the whole sample I have no problem with the test but I'm not sure about its interpratation. I have a model that estimate the relation between globalization and growth, with different kinds of controls. If I run the simplest model I have fixed effect, If I add controls about financial development the model gives me fixed effect, if I add also government controls I have again random effect. It's just an example since I have different regressors but the question is about the alternance of the fixed and random effects, it makes sense?
Thanks you all
1 First of all sometimes Stata tells me the matrix is not positive-define, how I can solve this problem? I read someting about the options sigmamore but the use is not pretty clear.
2 Sometimes test failed since the answer is "model fitted on these data fails to meet the asymptotic assumptions of the Hausman test; see suest for a generalized test". I have to use this different test? How it works? I read also about xtoverid test, it could be an alternative?
3 I use robust clustered stantard error but the Hausman test cannot be performed with them. Could be a problem in the results?
4 When I use the model in the whole sample I have no problem with the test but I'm not sure about its interpratation. I have a model that estimate the relation between globalization and growth, with different kinds of controls. If I run the simplest model I have fixed effect, If I add controls about financial development the model gives me fixed effect, if I add also government controls I have again random effect. It's just an example since I have different regressors but the question is about the alternance of the fixed and random effects, it makes sense?
Thanks you all
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