The Equivalence of Panel Data Estimators under Orthogonal Experimental Design
AbstractThis paper demonstrates the equivalence between pooled OLS, Fixed Effects, and Random Effects estimates when applied to data generated from an orthogonal experimental design under certain conditions. We show that the point estimates of the treatment effects are identical between these three panel data estimators but that the estimated standard errors differ. Specifically, the estimated variance covariance matrices are identical between FE and RE but differ from that of OLS. Despite the equivalence it is meaningful to test for OLS vs FE/RE because the error distributional assumptions are different.
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Bibliographic InfoPaper provided by Department of Economics, Appalachian State University in its series Working Papers with number 05-07.
Date of creation: 2005
Date of revision:
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Postal: Thelma C. Raley Hall, Boone, North Carolina 28608
Web page: http://www.business.appstate.edu/departments/economics/
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-06-14 (All new papers)
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- Oaxaca, Ronald L. & Geisler, Iris, 2003. "Fixed effects models with time invariant variables: a theoretical note," Economics Letters, Elsevier, vol. 80(3), pages 373-377, September.
- Subhasish Dugar & Todd Sorensen, 2006. "Hassle Costs, Price-Matching Guarantees and Price Competition: An Experiment," Review of Industrial Organization, Springer, vol. 28(4), pages 359-378, June.
- Dickinson, David & Oaxaca, Ronald L., 2006.
"Statistical Discrimination in Labor Markets: An Experimental Analysis,"
IZA Discussion Papers
2305, Institute for the Study of Labor (IZA).
- David L. Dickinson & Ronald L. Oaxaca, 2009. "Statistical Discrimination in Labor Markets: An Experimental Analysis," Southern Economic Journal, Southern Economic Association, vol. 76(1), pages 16-31, July.
- David Dickinson & Ronald Oaxaca, 2005. "Statistical Discrimination in Labor Markets: An Experimental Analysis," Working Papers 05-11, Department of Economics, Appalachian State University.
- David Dickinson & Ronald Oaxaca, 2004. "Statistical Discrimination in Labor Markets: An Experimental Analysis," Working Papers 2004-04, Utah State University, Department of Economics.
- Morawetz, Ulrich B. & De Groote, Hugo & Kimenju, Simon Chege, 2011. "Improving the Use of Experimental Auctions in Africa: Theory and Evidence," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 36(2), August.
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