Entity fixed effects models
A) Allow the intercept in the regression model to differ cross-sectionally but not over time, while all of the slope estimates are fixed both cross-sectionally and over time
B) Allow the slope in the regression model to differ cross-sectionally but not over time, while the intercept estimates are fixed both cross-sectionally and over time
C) Allow the intercept in the regression model to differ over time, while all of the slope estimates are different both cross-sectionally and over time
D) Any of the above could be true depending on the model specification

Question

Quizplus · Accepted Answer

Entity fixed effects models allow for the intercept to vary across entities (e.g., individuals, firms, countries) to account for unobserved heterogeneity, while keeping the slope coefficients constant across entities and over time.

Entity Fixed Effects Models