I am using panel data and trying to decide between the fixed and random effects models to use.
When I type "hausman fixed random", the results are not to reject the null hypothesis. Nonetheless, I have been warned instead do write the hausman test code considering random effects first: "hausman random fixed", and when I do this it results in a negative p-value error, even when adding the option sigmamore.
Why does it make such a difference which effects to consider first in the hausman test code? Also, what are my options trying to solve this problem of negative p-value?
Best,
João
When I type "hausman fixed random", the results are not to reject the null hypothesis. Nonetheless, I have been warned instead do write the hausman test code considering random effects first: "hausman random fixed", and when I do this it results in a negative p-value error, even when adding the option sigmamore.
Why does it make such a difference which effects to consider first in the hausman test code? Also, what are my options trying to solve this problem of negative p-value?
Best,
João
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