TOPIC 7: POST-ESTIMATION DIAGNOSTIC TESTS

1. 1. __________ test is a test to confirm the presence of unobserved heterogeneity factor (also called country-specific fixed-effects) in panel data.

2. 2. Testing for time-specific fixed-effects is done via "testparm i.year" command after running the "xtreg" command in panel data estimation.

• TRUE

• FALSE

3. 3. To confirm that multicollinearity issue is not present among the variables, the mean VIF must be _____ than 10 in Multicollinearity test.

4. 4. Option "______" can be added at the end of the "xtreg" estimation command to correct for the heteroskedasticity problem in the panel data model.

5. 5. First-order serial correlation test in panel data model can be performed via "_______" command on all variables in the model.