The DOI matches its Crossref record; 10 of the 10 references it cites were found in a registry or an index.
Explaining Fixed Effects: Random Effects Modeling of Time-Series Cross-Sectional and Panel Data
Open accessAbstract
This article challenges Fixed Effects (FE) modeling as the ‘default’ for time-series-cross-sectional and panel data. Understanding different within and between effects is crucial when choosing modeling strategies. The downside of Random Effects (RE) modeling—correlated lower-level covariates and higher-level residuals—is omitted-variable bias, solvable with Mundlak's (1978a) formulation. Consequently, RE can provide everything that FE promises and more, as confirmed by Monte-Carlo simulations, which additionally show problems with Plümper and Troeger's FE Vector Decomposition method when data are unbalanced. As well as incorporating time-invariant variables, RE models are readily extendable, with random coefficients, cross-level interactions and complex variance functions. We argue not simply for technical solutions to endogeneity, but for the substantive importance of context/heterogeneity, modeled using RE. The implications extend beyond political science to all multilevel datasets. However, omitted variables could still bias estimated higher-level variable effects; as with any model, care is required in interpretation.
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Cites
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Hausman, J. A. (1978) · Econometrica · doi:10.2307/1913827 · Cited by 18,820
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Correlated random effects models with unbalanced panels
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Cited by
Fixed and random effects models: making an informed choice
Bell, A., Fairbrother, M., & Jones, K. (2019) · Quality & Quantity · doi:10.1007/s11135-018-0802-x · Cited by 1,085
Self-citationWang, H., Liddell, C. A., Coates, M. M., Mooney, M. D., Levitz, C. E., Schumacher, A. E., Apfel, H., Iannarone, M., Phillips, B., Lofgren, K. T., et al. (2014) · The Lancet · doi:10.1016/s0140-6736(14)60497-9 · Cited by 799
Ketokivi, M., & McIntosh, C. N. (2017) · Journal of Operations Management · doi:10.1016/j.jom.2017.05.001 · Cited by 429
Biodiversity and ecosystem functioning relations in European forests depend on environmental context
Ratcliffe, S., Wirth, C., Jucker, T., van der Plas, F., Scherer‐Lorenzen, M., Verheyen, K., Allan, E., Benavides, R., Bruelheide, H., Ohse, B., et al. (2017) · Ecology Letters · doi:10.1111/ele.12849 · Cited by 389
Westfall, J., Van Boven, L., Chambers, J. R., & Judd, C. M. (2015) · Perspectives on Psychological Science · doi:10.1177/1745691615569849 · Cited by 363
Metadata
- Authors
- Bell, A., & Jones, K.
- Venue
- Political Science Research and Methods
- Publisher
- Cambridge University Press (CUP)
- Published
- 2014-05-01
- Volume
- 3
- Issue
- 1
- Pages
- 133-153
- ISSN
- 2049-8470 (ISSN-L)
- 2049-8489
- OpenAlex
- W2118248224
- Cited by
- 1,515
- References
- 10
- FWCI
- 172.94
- Type
- journal article
- Language
- en
- Open access
- hybrid
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