Fixed vs Random: The Hausman Test Four Decades Later
Abstract
Hausman (1978) represented a tectonic shift in inference related to the specification of econometric models. The seminal insight that one could compare two models which were both consistent under the null spawned a test which was both simple and powerful. The so-called ‘Hausman test’ has been applied and extended theoretically in a variety of econometric domains. This paper discusses the basic Hausman test and its development within econometric panel data settings since its publication. We focus on the construction of the Hausman test in a variety of panel data settings, and in particular, the recent adaptation of the Hausman test to semiparametric and nonparametric panel data models. We present simulation experiments which show the value of the Hausman test in a nonparametric setting, focusing primarily on the consequences of parametric model misspecification for the Hausman test procedure. A formal application of the Hausman test is also given focusing on testing between fixed and random effects within a panel data model of gasoline demand.
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The Hausman test indicates that the unique errors are correlated with the regressors.
“The Hausman test [27] indicate that the unique errors are correlated with the regressors”
From Six Million (Suspected) Fake Stars on GitHub: A Growing Spiral of Popularity Contests, Spams, and Malware (2026) · cites this paper as [27]
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Cardenas, I., Johnson, L., & Postmus, J. L. (2022) · Journal of Interpersonal Violence · doi:10.1177/08862605211013958 · Cited by 23 · see citing works
He, H., Yang, H., Burckhardt, P., Kapravelos, A., Vasilescu, B., & Kästner, C. (2026) · Proceedings of the 2026 IEEE/ACM 48th International Conference on Software Engineering · doi:10.1145/3744916.3764531 · Cited by 2 · see citing works
- Authors
- Amini, S., Delgado, M. S., Henderson, D. J., & Parmeter, C. F.
- Venue
- Advances in Econometrics
- Publisher
- Emerald Group Publishing Limited
- Published
- 2012-01
- Pages
- 479-513
- ISSN
- 0731-9053 (ISSN-L)
- OpenAlex
- W2501654962
- Cited by
- 77
- References
- 0
- Citations by year
- 2026: 17 · 2025: 12 · 2024: 12 · 2023: 15 · 2022: 6 · 2021: 4 · 2020: 4 · 2019: 1 · 2016: 3 · 2013: 3
- FWCI
- 4.94
- Type
- book chapter
- Language
- en
- Open access
- closed
- Locations
- Advances in econometrics (publishedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Spatial and Panel Data Analysis
- Physical Sciences › Mathematics › Statistics and Probability › Statistical Methods and Bayesian Inference
- Physical Sciences › Mathematics › Statistics and Probability › Statistical Methods and Inference
- Keywords
- Hausman test, fixed effects vs random effects, panel data models, model misspecification, specification testing, gasoline consumption, simulation experiments
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