The Lagrange Multiplier Test for Random Effects in Panel Data Analysis
Вставка
- Опубліковано 2 жов 2024
- Full text: phantran.net/l...
Database: drive.google.c...
Data in excel: docs.google.co...
In this video, we will introduce the Lagrange Multiplier Test, which is used to determine whether random effects are significant in panel data model. We will show you how to perform it step by step on our panel data, from which we presented the results in our article, published on Sustainability review in 2019.
In 1980, Breusch and Pagan developed a Lagrange multiplier test for random effects, so this test is also called Breusch-Pagan Lagrange Multiplier test. The test helps us choose between random-effects model regression and pooled OLS regression.
The null hypothesis of the Lagrange Multiplier Test assumes that, the random effects are not significant, and they can be excluded from the model without a substantial loss of information. Conversely, the alternative hypothesis suggests that, the random effects are indeed essential and contribute significantly to the overall model fit.
The LM statistic follows a chi-square distribution with 1 degree of freedom, because we are testing for one measure only - the variance of random effects term. If we reject the null hypothesis using this test, we conclude that the random effects are significant in the model, and the use of the Random Effects Model is appropriate.
We will show you how to implement the Lagrange Multiplier Test on our panel data, that includes 434 year-observations of 62 provinces as entities of our sample; each province has 7 year-observations. Our research aims to study the relationship between foreign direct investment and sustainability at provincial level, in a developing host country such as Vietnam, in the period between 2010 and 2016.
Highly informative and well-presented. A definite must-watch for analysts!
This video makes understanding the Lagrange Multiplier Test a breeze! Excellent work.
As someone new to panel data analysis, this tutorial is a lifesaver. Great job!
Highly informative and well-presented. A definite must-watch for analysts!
A must-watch for anyone dealing with panel data analysis. Thank you!
Impressive walkthrough of the Lagrange Multiplier Test! Highly recommended.
Bravo! Thoroughly impressed with the breakdown of the Lagrange Multiplier Test.
Great job at simplifying the Lagrange Multiplier Test. Highly appreciated!
Kudos for simplifying the Lagrange Multiplier Test! Very helpful.
Thank you for breaking down the Lagrange Multiplier Test so effectively!
This tutorial takes the complexity out of the Lagrange Multiplier Test. Fantastic!
Fantastic job at elucidating the Lagrange Multiplier Test. Thank you!
This video makes understanding the Lagrange Multiplier Test a breeze! Excellent work.
This video makes understanding the Lagrange Multiplier Test a breeze! Excellent work.
An exceptional resource for analysts looking to master panel data techniques.
A superb explanation of the Lagrange Multiplier Test! Clear and concise.
Clear, concise, and immensely helpful. Exactly what I needed for analysis!
Clear, concise, and immensely helpful. Exactly what I needed for analysis!
Clear, concise, and incredibly insightful. A must-watch for analysts!
Invaluable resource for anyone tackling panel data analysis. Well done!
Thumbs up for the clarity and depth of this Lagrange Multiplier Test tutorial!
Thumbs up for the clarity and depth of this Lagrange Multiplier Test tutorial!
Thoroughly impressed with the depth of explanation in this tutorial. Well done!
A gem of a tutorial for understanding the Lagrange Multiplier Test. Brilliant!
This video is a game-changer for panel data analysts. Well worth watching!
This video is a game-changer for panel data analysts. Well worth watching!
A gem of a tutorial for understanding the Lagrange Multiplier Test. Brilliant!
This video simplifies the Lagrange Multiplier Test like no other. Exceptional!
I wish I had found this Lagrange Multiplier Test tutorial sooner. Superb!
Finally, a tutorial that makes the Lagrange Multiplier Test easy to grasp. Thank you!
Finally, a tutorial that makes panel data analysis less daunting. Outstanding!