Choosing fixed/random effects model with Hausman-test

[Zerathios]

Hello!

I am trying to run a Correlated random effects - Hausman test on this regression in order to determine if a fixed or random effects model is appropriate.

I get the error message "** WARNING: estimated cross-section random effects variance is zero."
Is there a reason to why this is happening?

I've looked it up on the web but I haven't found a good answer.

Kind Regards, Zerathios

[EViews Glenn]

For your data, the estimate of the random effects variance is zero.

[Zerathios]

For your data, the estimate of the random effects variance is zero.

Does this mean that the random effects model is not a well-suited approach to this data or simply that there is something wrong with my data?

[EViews Glenn]

The estimates suggest that there are no random effects.

[Zerathios]

The estimates suggest that there are no random effects.

Thank you for the answer Glenn!

I have another question: I want to run a fixed effects model and a random effects model respectively with robust standard errors, adjusting for any heteroscedasticity present. Is this possible in Eviews 8? I have searched the forums but there does not seem to be any clear answer to this question.

Kind Regards, Zerathios

[Carlo Lazzaro]

Zearthios may find the following thread useful:
http://forums.eviews.com/viewtopic.php?t=362&f=4.
Kind regards,
Carlo