Hi guys,

I have several questions regarding the proper use of model for my data. I have panel data with 4 observations per panel-ID. I want to observe what the effect is of the variable 'chosen' on the variable 'r2_rank" additionally I would like to know the effects of 'treatmentgroup' 'discounted' and 'type'.
However, I am not entirely sure what my prefered model would be. I don't know whether I should use pooled OLS, random effects or fixed effects and whether I should include clustered standard errors.
I included the pooled OLS, the random effects, the fixed effects and a hausman test (between RE and FE) below.

This is the code I used:
xtset panelid t

*Pooled OLS
reg r2_rank chosen i.treatment_group discounted type, vce(cluster panelid)

*Random effects with clustered standard errors
xtreg r2_rank chosen i.treatment_group discounted type, re vce(cluster panelid)

*RE and FE and hausman test
xtreg r2_rank chosen i.treatment_group discounted type, fe
estimates store fe
xtreg r2_rank chosen i.treatment_group discounted type, re
estimates store re

hausman fe re

Let me know what you think!

David

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