Hi all,

I am working with a panel data set of about 180 countries spread over 27 years.

My data suffers from both serial correlation and heteroskedasticity, which I correct for using the user written program -xtscc-.
I would use this program to provide estimates for my Hausman test, but the program only works with fixed effects, not random effects.

My problem is that, as far as I am aware, the Hausman test is only valid under homoskedasticity, and thus invalid in my case.
However, when I try correcting for this by adding -, robust- at the end of my -xtreg- regression, Stata is unable to compute the Hausman test.
The exact error comes out as "hausman cannot be used with vce(robust), vce(cluster cvar), or p-weighted data".

Do anyone have a solution for this?

As I have GDP as an explanatory variable, I am aware that the fixed effects model is probably the best choice from a theoretical standpoint.
This is just to cover all my bases for my bachelor's thesis.

Also, a side question: Does anyone know of another (better) way to correct for serial correlation and heteroskedasticity at the same time, than the -xtscc- program?

Any comments will be greatly appreciated,

Mathias