Hi all, i have encountered a minor problem here where i've read different opinion on utilizing BP test and Hausman test.
This is taken from literature, author test REM and FEM first using Hausman test, and got REM favorable....due to got REM, author said there is need to test REM with POLS aftermath using BP test...
my question is, which test actually (BP/Hausman) should be employed first? because my basic is, we should use BP test first between POLS and REM....then cont with Hausman between REM and FEM..
regarding situation taken from literature above, maybe i can say they did wrong procedure? (because they didn't follow correct order which BP test first, then go to Hausman next)..or is there got any excuses for author to use Hausman first then proceed with BP test???
Thanks a lot.
This is taken from literature, author test REM and FEM first using Hausman test, and got REM favorable....due to got REM, author said there is need to test REM with POLS aftermath using BP test...
my question is, which test actually (BP/Hausman) should be employed first? because my basic is, we should use BP test first between POLS and REM....then cont with Hausman between REM and FEM..
regarding situation taken from literature above, maybe i can say they did wrong procedure? (because they didn't follow correct order which BP test first, then go to Hausman next)..or is there got any excuses for author to use Hausman first then proceed with BP test???
Thanks a lot.