Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/36982
Authors: 
Frondel, Manuel
Vance, Colin
Year of Publication: 
2010
Series/Report no.: 
Ruhr economic papers 160
Abstract: 
This paper proposes a variant of the classical HAUSMAN specification test commonly employed to decide whether the estimation of a random-effects model is a viable alternative to estimating fixed effects. Whereas the classical test probes the equality of fixed- and random effects, the proposed variant focuses on the equality of between-groups and fixed-effects coefficients. While both test procedures lead to the same conclusions, the panel model specification underlying our testing strategy facilitates the simultaneous estimation of the fixed- and between-groups effects. As a consequence, we are able to examine both the equality of the whole range of coefficients as well as that of individual variables. The usefulness of the test is illustrated using a panel of household travel data for Germany.
Subjects: 
Specification tests
fuel price elasticity
JEL: 
C12
ISBN: 
978-3-86788-179-1
Document Type: 
Working Paper

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