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Fixed effects models versus mixed effects models for clustered data: Reviewing the approaches, disentangling the differences, and making recommendations.

2018/06/04 by Daniel McNeish, Ken Kelley · 2 citations
Mathematics · Decision Sciences · Economics, Econometrics and Finance · #Statistical Methods and Bayesian Inference #Psychometric Methodologies and Testing #Spatial and Panel Data Analysis

paper · doi:10.1037/met0000182

openalex publication_date 2018/06/04 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/05

Abstract

Clustered data are common in many fields. Some prominent examples of clustering are employees clustered within supervisors, students within classrooms, and clients within therapists. Many methods exist that explicitly consider the dependency introduced by a clustered data structure, but the multitude of available options has resulted in rigid disciplinary preferences. For example, those working in the psychological, organizational behavior, medical, and educational fields generally prefer mixed effects models, whereas those working in economics, behavioral finance, and strategic management generally prefer fixed effects models. However, increasingly interdisciplinary research has caused lines that separate the fields grounded in psychology and those grounded in economics to blur, leading to researchers encountering unfamiliar statistical methods commonly found in other disciplines. Persistent discipline-specific preferences can be particularly problematic because (a) each approach has certain limitations that can restrict the types of research questions that can be appropriately addressed, and (b) analyses based on the statistical modeling decisions common in one discipline can be difficult to understand for researchers trained in alternative disciplines. This can impede cross-disciplinary collaboration and limit the ability of scientists to make appropriate use of research from adjacent fields. This article discusses the differences between mixed effects and fixed effects models for clustered data, reviews each approach, and helps to identify when each approach is optimal. We then discuss the within-between specification, which blends advantageous properties of each framework into a single model. (PsycINFO Database Record (c) 2019 APA, all rights reserved).

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