aliquote.org

April 24, 2020

There are an untold number of analyses of panel data affected by an issue that is almost impossible to identify because R and Stata obscure the problem. Thanks to multi-collinearity checks that automatically drop predictors in regression models, a two-way fixed effects model can produce sensible-looking results that are not just irrelevant to the question at hand, but practically nonsense. — What Panel Data Is Really All About