when do you use random effects model
In econometrics, random effects models are used in the analysis of hierarchical or panel data when one assumes no fixed effects (it allows for individual effects). The random effects model is a special case of the fixed effects model.here are two common assumptions made about the individual specific effect, the random effects assumption and the fixed effects assumption. The random effects assumption (made in a random effects model) is that the individual specific effects are uncorrelated with the independent variables.