Panel Data Models Skill

This skill covers panel data econometrics: pooled OLS, fixed effects (FE), random effects (RE), and two-way FE models. It guides model selection, assumption testing, and interpretation for longitudinal/panel datasets.

Key Terminology

• Panel dataset: observations on N units (individuals, firms, countries) over T time periods
• Balanced panel: every unit observed in every period
• Unbalanced panel: some unit-period observations missing
• Unobserved heterogeneity (αᵢ): time-invariant unit-specific factors (e.g., firm culture, individual ability)

Model Selection Framework