Consider the following statements:
(a) A fixed effects model is designed to analyze changes within entities (e.g., individuals, companies, countries), removal of any possible entity-specific effects that are constant over time is not necessary.
(b) In Random effects model, the variation across entities is assumed to be random and uncorrelated with the dependent variable or the predictors.
(c) A Mixed effects model is designed to incorporate both fixed and random effects by allowing for variability in intercepts and/or slopes across entities.
(d) The 'Random effects model' and 'Mixed effects model' can be used interchangeably as they essentially refer to the same statistical model.
Select the correct statement(s) is/are?
1
Only statements b and c are correct.
2
Only statements a and b are correct.
3
Only statements b, c and d are correct.
4
Only statements a, b, and c are correct.