I have heterogeneous panel data model,, N=6 T=21,What is the appropriate regression model? I have applied CD test , It shows the data have cross-sectional dependency
I used the 2nd unit root tests , and the result found that my data is stationary at level
is it possible to use PMG ? would you pleas explain the appropriate regression model?
There are a number of regression models that may be suitable for a heterogeneous panel data model with stationary level data. The appropriate model is selected based on the precise research question and the nature of the data. You can choose from FEM/REM/First-Difference Model/Pooled OLS/BEM, keeping in mind that the applicability of each model depends on the nature of the data and the research question. Consider the strengths and weaknesses of each model when determining which model fits best for your analysis.
Dickson Utonga According to references and papers, static panel models (pooled, fixed , and random) are not appropriate in the case of heterogeneity. Can you explain to me what is the BEM model?
I'm working on the determinants of financial inclusion The dependent variable is a composite indicator of financial inclusion Independent variables, number of women, dependency rate, per capita GDP, human development index, percentage of urban population Could you pleas suggest me a the appropriate method ?
Nada Na
The BEM (Blundell-Bond) model is a dynamic panel data model that takes into account unobserved heterogeneity by incorporating lagged values of the dependent variable and the independent variables to control for individual-specific effects. It also accounts for endogeneity by using instrumental variables.
Also, is that work on the determinants related to the original question or something new?
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