Q4 (A) What are the special features of (a) cross-section data, (b) time series
ID: 1144642 • Letter: Q
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Q4 (A) What are the special features of (a) cross-section data, (b) time series data, and (c) panel data? Q4 (B) What is meant by a fixed effects model (FEM)? Since panel data have both time and space dimensions, how does FEM allow for both dimensions? Q4 (A) What are the special features of (a) cross-section data, (b) time series data, and (c) panel data? Q4 (B) What is meant by a fixed effects model (FEM)? Since panel data have both time and space dimensions, how does FEM allow for both dimensions? Q4 (A) What are the special features of (a) cross-section data, (b) time series data, and (c) panel data? Q4 (B) What is meant by a fixed effects model (FEM)? Since panel data have both time and space dimensions, how does FEM allow for both dimensions?Explanation / Answer
Answer 4 a : There are various special features of different data such as :
Answer 4 b : For the estimation of the panel data. There is one of the most important techinque that is known as FEM ( Fixed effect Model) . In FEM , it is the intercept of the model in regression taken different individuals, they can used dummy variables into an account. FEM is suitable where the individual specific intercept may be correlated with one or more regressors into an account.
Since panel Data has taken both time and space into an account. This shows that FEM has taken dummy variable into an account which resulted in least square dummy variable . Least square dummy variable taken both time as well as space into an account and provide best result when N ( population size ) is not enough large.
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