Fixed effects vs random effects

[Nish Dhanji]

Hello,

I am new to this forum and new to econometrics, so I was running a fixed effects regression but I found my main independent variable of interest to be statistically insignificant using the fixed effects estimator, when I checked the within variation of that variable it was fairly small (0.06 standard deviation), could this small within variation be the cause of the variable being insignificant using FE and could it warrant the use of the random effects estimator instead ?

Any help or points in the right direction would be much appreciated. Thanks

[Carlo Lazzaro]

Nish:
welcome to this forum.
The small within variation may well explain why your predictor did not reach statistical significance.
However, before switching to -re- specification you should compare -fe- vs -re- via - hausman-.
For the future, please provide what you typed and what Stata gave you back via CODE delimiters and/or share an excerpt/example of your data via -dataex-. Thanks.

[Nish Dhanji]

Thank you very much for your reply and I’ll provide my stata code and output in all future posts

best,
Nish