The dependent variable is investment, and the independent variables are mvalue and kstock:
Code:
webuse grunfeld, clear reg invest mvalue kstock xtreg invest mvalue kstock, fe xtreg invest mvalue kstock, re
How should I interpret these results ?
The endogeneity between time-invariant individual effect and independent variables are not significantly acceptable from the Hausman test, so this difference is not derived from Omitted Variable Bias.
I think these three estimates should be same because of no OVB...
Code:
. reg invest mvalue kstock Source | SS df MS Number of obs = 200 -------------+---------------------------------- F(2, 197) = 426.58 Model | 7604093.48 2 3802046.74 Prob > F = 0.0000 Residual | 1755850.43 197 8912.94636 R-squared = 0.8124 -------------+---------------------------------- Adj R-squared = 0.8105 Total | 9359943.92 199 47034.8941 Root MSE = 94.408 ------------------------------------------------------------------------------ invest | Coef. Std. Err. t P>|t| [95% Conf. Interval] -------------+---------------------------------------------------------------- mvalue | .1155622 .0058357 19.80 0.000 .1040537 .1270706 kstock | .2306785 .0254758 9.05 0.000 .1804382 .2809188 _cons | -42.71437 9.511676 -4.49 0.000 -61.47215 -23.95659 ------------------------------------------------------------------------------ . . xtreg invest mvalue kstock, fe Fixed-effects (within) regression Number of obs = 200 Group variable: company Number of groups = 10 R-sq: Obs per group: within = 0.7668 min = 20 between = 0.8194 avg = 20.0 overall = 0.8060 max = 20 F(2,188) = 309.01 corr(u_i, Xb) = -0.1517 Prob > F = 0.0000 ------------------------------------------------------------------------------ invest | Coef. Std. Err. t P>|t| [95% Conf. Interval] -------------+---------------------------------------------------------------- mvalue | .1101238 .0118567 9.29 0.000 .0867345 .1335131 kstock | .3100653 .0173545 17.87 0.000 .2758308 .3442999 _cons | -58.74393 12.45369 -4.72 0.000 -83.31086 -34.177 -------------+---------------------------------------------------------------- sigma_u | 85.732501 sigma_e | 52.767964 rho | .72525012 (fraction of variance due to u_i) ------------------------------------------------------------------------------ F test that all u_i=0: F(9, 188) = 49.18 Prob > F = 0.0000 . . est store fixed . . xtreg invest mvalue kstock, re Random-effects GLS regression Number of obs = 200 Group variable: company Number of groups = 10 R-sq: Obs per group: within = 0.7668 min = 20 between = 0.8196 avg = 20.0 overall = 0.8061 max = 20 Wald chi2(2) = 657.67 corr(u_i, X) = 0 (assumed) Prob > chi2 = 0.0000 ------------------------------------------------------------------------------ invest | Coef. Std. Err. z P>|z| [95% Conf. Interval] -------------+---------------------------------------------------------------- mvalue | .1097811 .0104927 10.46 0.000 .0892159 .1303464 kstock | .308113 .0171805 17.93 0.000 .2744399 .3417861 _cons | -57.83441 28.89893 -2.00 0.045 -114.4753 -1.193537 -------------+---------------------------------------------------------------- sigma_u | 84.20095 sigma_e | 52.767964 rho | .71800838 (fraction of variance due to u_i) ------------------------------------------------------------------------------ . . hausman fixed ---- Coefficients ---- | (b) (B) (b-B) sqrt(diag(V_b-V_B)) | fixed . Difference S.E. -------------+---------------------------------------------------------------- mvalue | .1101238 .1097811 .0003427 .0055213 kstock | .3100653 .308113 .0019524 .0024516 ------------------------------------------------------------------------------ b = consistent under Ho and Ha; obtained from xtreg B = inconsistent under Ha, efficient under Ho; obtained from xtreg Test: Ho: difference in coefficients not systematic chi2(2) = (b-B)'[(V_b-V_B)^(-1)](b-B) = 2.33 Prob>chi2 = 0.3119 .
0 Response to Getting same estimates for Fixed Effects and Random Effects but not for pooled OLS
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