In the Fixed Effects regression model,using (n - 1)binary variables for the entities,the coefficient of the binary variable indicates
A)the level of the fixed effect of the ith entity.
B)will be either 0 or 1.
C)the difference in fixed effects between the ith and the first entity.
D)the response in the dependent variable to a percentage change in the binary variable.

Question

Quizplus · Accepted Answer

The coefficient of the binary variable in a Fixed Effects regression model represents the difference in fixed effects between the ith entity and the reference entity (often the first entity).

In the Fixed Effects Regression Model,using (N - 1)binary Variables