2024/12/29 by Andrew T. Karl, Karl, Andrew T.
Economics, Econometrics and Finance · Social Sciences · #FOS: Computer and information sciences #Labor market dynamics and wage inequality #Methodology (stat.ME) #Retirement, Disability, and Employment
paper · pdf · doi:10.48550/arxiv.2412.20555
openalex publication_date 2024/12/29 · openalex created_date 2025/01/01 · openalex updated_date 2026/07/28
The Hausman specification test assesses the random-effects specification by comparing the random-effects estimator with a fixed-effects alternative. This note shows how a recently proposed bias diagnostic for linear mixed models can complement that test in random-effects panel-data applications. The diagnostic delivers parameter-specific internal estimates of finite-sample bias, together with permutation-based p-values, from a single fitted random-effects model. We illustrate its use in a gasoline-demand panel and in a value-added model for teacher evaluation using publicly available \textsfR packages, and we discuss how the resulting coefficient-specific bias summaries can be incorporated into routine practice.