TOPIC 4: PANEL DATA MODELS-FIXED EFFECTS

1. 1. Fixed effects model assumes that the unobserved heterogeneity factor is present and __________ with the regressors.

2. 2. There are two methods to estimate Fixed effects model, namely LSDV and _________ estimation.

3. 3. In LSDV estimation, option "i.year" is added at the end of the "regress" command in Stata to create a dummy variable for each country.

• TRUE

• FALSE

4. 4. LSDV estimation allows for _______ intercepts for different entities, but all entities have homogenous slopes.

5. 5. Within estimation transforms the original data in panel dataset to become ________ data.