From the course: Advanced and Specialized Statistics with Stata

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Linear panel estimators

Linear panel estimators - Stata Tutorial

From the course: Advanced and Specialized Statistics with Stata

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Linear panel estimators

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- [Instructor] Let's explore Linear Panel Data Estimators in some detail. These estimators make more complicated assumptions about the error term in a regression, when compared to ordinary least squares. The advantage of these estimators is that they allow users to build a more nuanced regression model that can theoretically be much more powerful than standard ordinary least squares estimation from cross-sectional data. Let's have a very quick, visual recap of what ordinary least squares regression tries to achieve. Ordinary least squares runs a line of best fit throughout data. In this example, the red line is the regression line. The difference between the estimate of regression line and the actual data points are called residuals. Adding all the individual residuals together gives us something called the Error Term. And because positives and negatives cancel out, the average value of this term will always be zero. The…

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