The Bias of the Fixed Effects Estimator in Nonlinear Models

  title={The Bias of the Fixed Effects Estimator in Nonlinear Models},
  author={William H. Greene},
The nonlinear fixed effects model has two shortcomings, one practical, one methodological. The practical obstacle relates to the difficulty of estimating nonlinear models with possibly thousands of dummy variable coefficients. In fact, in many models of interest to practitioners, estimation of the fixed effects model is feasible even in panels with very large numbers of groups. The result, though not new, appears not to be well known. The more difficult, methodological issue is the incidental… CONTINUE READING


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