Econometrica: Nov 1981, Volume 49, Issue 6
Random Effects, Fixed Effects, Convolution, and Separation
Joseph A. Yahav, Yair MundlakA conceptual framework is suggested for integrating fixed effects and random effects models into one framework. In that framework, the pertinent distribution is a convolution of two distributions; one is a degenerate distribution. A method is suggested and analyzed for separating between the two distributions when the second distribution is normal.
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