https://www.stata.com/manuals13/xtxtreg.pdf is the xtreg documentation. I have two questions.

1. On page 8 I do not understand the "If sigma squared nu = 0, meaning that nu_i is always 0" part. Why nu_i should always be zero?

2. Where is the explicit formula of "rho" (fraction of variance due to u_i) given? I cannot find it in this document and wonder why the document presents it.

1. On page 8 I do not understand the "If sigma squared nu = 0, meaning that nu_i is always 0" part. Why nu_i should always be zero?

2. Where is the explicit formula of "rho" (fraction of variance due to u_i) given? I cannot find it in this document and wonder why the document presents it.

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