The article by Subhayu Bandyopadhyay and Howard J. Wall, The Determinants of Aid in the Post-Cold War
Question:
The article by Subhayu Bandyopadhyay and Howard J. Wall, “The Determinants of Aid in the Post-Cold War Era,” Review, Federal Reserve Bank of St. Louis, November/December 2007, vol. 89, number 6, pp. 533–547, uses panel data to estimate the responsiveness of aid to recipient countries’ economic and physical needs, civil/political rights, and government effectiveness. The data are for 135 countries for three years. The article and data can be found at: http:// research.stlouisfed.org/publications/review/past/2007 in the November/December Vol. 89, No. 10 section. The data can also be found on the textbook website in Table 16.18. Estimate the authors’ model (given on page 534 of their article) using a random effects estimator. Compare our results with those of the pooled and fixed effects estimators given by the authors in Table 2 of their article. Which model is appropriate here, fixed effects or random effects? Why?
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