Testing for slope heterogeneity bias in the fixed-effects estimator

Javier Alejo, Antonio Galvao and Gabriel Montes-Rojas ()

Stata Journal, 2025, vol. 25, issue 4, 836-846

Abstract: In this article, we discuss a postestimation command, xthbtest, to test for the validity of the fixed-effects estimation in the presence of heterogeneity in panel-data settings. The procedure is based on the conditions to obtain the mean effect across individuals by comparing it with the mean-group alternative estimator. An empirical application with a Solow-type growth model illustrates its implementation.

Keywords: xthbtest; panel data; fixed effects; heterogeneity (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1177/1536867X251398607

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