FIXED AND RANSOM EFFECTS MODELS IN THE PANEL DATA ANALYSIS

Abstract

This paper exposes the basic postulates in application of fixed and ransom effect models in the analysis of the panel data. The special characteristic of these models is in that you can follow the time and structural components of the data, so the regression equation differs from the common one regarding the meaning of the regressive parameters. The first part of the paper exposes the theoretic postulates, continuing with starting assumptions for parameters assessment, both of models with fixed and ransom effects. These models are applied in the analysis of the groups of households, enterprises, countries etc.