I have panel data comprises 5 cross sections across 14 independent variables. the data time series part is 10 years. while I run the panel data model for pooled OLS and FE model it gives results while for Random effect model it shows error as RE estimation required number of cross-section>number of coefficients for between estimators for estimation of RE innovation variance. Can anyone help me how to get the results for Random effect model?
Can you clarify what statistical package you are using for this?
Generally, you will indeed need more cross-sections than independent variables. Another issue is if you have too few observations relative to fixed effects to estimate. The fact that the FE model runs is reassuring, but what is your sample size, and is it balanced?
Thank you for your reply. I am using e-views and gretl. Yes its a balanced panel data. Five cross section, and 14 IDV and each variable data is for 10 years annual data so sample is just 50 observations across each variable spread across 5 cross sections.
I chceked cross section efffect and time varying effect in tge data its showing cross section effect doesn’t exist. So does this mean i should conclude with pooled ols model or can any other model need to be checked? Thanks in Advance.
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