I am running a regression inluding the following variables: lnwage, age, age squared, experience, experiencesquared
as well as others.
When I conduct the Hausman test for fixed effects, I get a message saying: the rank of the differenced variance matrix doesn't equal the number of coefficients tested.
Furthermore, the test results in a negative value, and it says that the model fitted on these data failed to meet to asymptotic assumptions of the Hausman test.
When I take out experience squared, the second problem disappears, so I suspect it is related to that. However, I need to include experience squared in my model.
I am aware this question has been asked many times but I still haven't quite found how to fix my problem and have limited time left to do so.
Hence I would really appreciate it if anyone knows a command or something I could do to keep experience squared in my model and conduct the Hausman test so I know whether a fixed effects model is appropriate.
Many thanks,
Ella
as well as others.
When I conduct the Hausman test for fixed effects, I get a message saying: the rank of the differenced variance matrix doesn't equal the number of coefficients tested.
Furthermore, the test results in a negative value, and it says that the model fitted on these data failed to meet to asymptotic assumptions of the Hausman test.
When I take out experience squared, the second problem disappears, so I suspect it is related to that. However, I need to include experience squared in my model.
I am aware this question has been asked many times but I still haven't quite found how to fix my problem and have limited time left to do so.
Hence I would really appreciate it if anyone knows a command or something I could do to keep experience squared in my model and conduct the Hausman test so I know whether a fixed effects model is appropriate.
Many thanks,
Ella
