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MMLU-Pro / 7656 / Which of the following is a disadvantage of the fixed effects approach to…

Problem

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question

Which of the following is a disadvantage of the fixed effects approach to estimating a panel model?

category

economics

options

  1. The approach may not be valid if the composite error term is correlated with one or more of the explanatory variables
  2. The approach may not be valid if the dependent variable is correlated with one or more of the explanatory variables
  3. The approach can only capture temporal variation and not cross-sectional heterogeneity in the dependent variable
  4. The model is likely to be easy to estimate
  5. The model cannot capture individual-specific effects
  6. The model is likely to be technical to estimate
  7. The fixed effects approach can handle large amounts of data without any loss of degrees of freedom
  8. The fixed effects approach can only capture cross-sectional heterogeneity and not temporal variation in the dependent variable.
  9. The fixed effects approach cannot handle time-invariant variables
  10. The number of parameters to estimate may be large, resulting in a loss of degrees of freedom

src

ori_mmlu-econometrics

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Source and history

upstream_id / Original problem ID
7656
task_id
73ec3d44-4f41-5e52-988d-e42c18a00149
task_key
default--test--7656
task_revision_id
1
config / split
default / test

Official source

initial import