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  • Facing Heteroscadcity in unbalanced panel data

    Hi
    There are two models.
    Data taken from only 1 country and there are 25 institutes.
    total observations=425
    Years= 2003-2019

    Hausman's selected the Fixed Effect Model in Model 1; and Random Effect Model in Model 2) (but facing heteroscedasticity issue)

    There are three methods to remove the hetero issue in unbalanced panel:
    1. Robust Standard Error (but giving insignificant results)
    2. Transformation (Taking log) (i have taken the log but not giving more significant results 3/8)
    3. The last one is Weighted Least Square Method (GLS/FGLS) (giving good results) (so can we use this method for both fixed and random effect models??)
    Many Thanks!


  • #2
    Please help me out. Which technique will be appropriate for my dataset?

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    • #3
      Haj:
      you cannot use-hausman- with non-default standard errors.
      Kind regards,
      Carlo
      (StataNow 18.5)

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