About fixed effects

Fixed effects control for individual effects in a model when there are multiple observations per individual. (Here, an “individual” may refer to a person, or to a larger unit of observation, such as a school or county.) Using fixed effects has the same result as including that category variable as an explanatory variable, but there are important differences:

• Unlike category variables, fixed effects do not affect the degrees-of-freedom in the model. Therefore the p-values of standard errors and the adjusted R² may differ between a model that uses fixed effects and one that does not.
• With a large number of individuals, fixed-effect models can be estimated much more quickly than the equivalent model without fixed effects.
• The estimated values of the fixed effects are not reported.
• If a weighted model is used, the weights are averaged within each value of the fixed effect variable.

See also:

• About robust and clustered standard errors

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