Test for panel analysis model selection
| Choosing method | Pooled OLS and FE | Pooled OLS and RE | FE and RE | Conclusion | |
|---|---|---|---|---|---|
| F test that all u_i = 0 Ho: poolability | Breusch–Pagan Lagrange multiplier test Ho: variances across entities is zero | Hausman test | |||
| Rice's model | lnEX | F = 12.56 p_value = 0.0000 → Choose: FE | p_value = 0.0000 → Choose: RE | p_value = 0.0215 → Choose: FE | Choose FE |
| ln(EX+1) | F = 11.80 p_value = 0.0000 → Choose: FE | p_value = 0.0000 → Choose: RE | p_value = 0.0207 → Choose: FE | Choose FE | |
| Coffee's model | lnEX | F = 13.33 → Choose: FE | p_value = 0.0000 → Choose: RE | p_value = 0.0000 → Choose: FE | Choose FE |
| ln(EX+1) | F = 10.29 → Choose: FE | p_value = 0.0000 → Choose: RE | p_value = 0.0002 → Choose: FE | Choose FE | |
| Choosing method | Pooled OLS and FE | Pooled OLS and RE | FE and RE | Conclusion | |
|---|---|---|---|---|---|
| Breusch–Pagan Lagrange multiplier test Ho: variances across entities is zero | Hausman test | ||||
| Rice's model | lnEX | Choose FE | |||
| ln(EX+1) | Choose FE | ||||
| Coffee's model | lnEX | Choose FE | |||
| ln(EX+1) | Choose FE | ||||
Source(s): Author's estimation (2020)