1. Download the panel type data from (http://dss.princeton.edu/training/Panel101.dta) using read.dta. We want to analyze the relationship between X1 (predictor) and Y (response) using various models. Please answer to the following questions.
2. Estimate the coefficient of X1 using Pooled OLS method, and report the estimated value of X1. After that, carry out the test for its significance at 10% significance level using p-value approach.
3. Let us include the country variable (as dummy) as well as X1, where delete the intercept term in the model. Estimate the coefficient of X1 using LSDV method, and report the estimated value of X1. After that, carry out the test the significance of X1 at 10% significance level using p-value approach.
4. Using fixed effect model, estimate the coefficient of X1, and test its significance at 10% significance level using p-value approach.
5. Compare the coefficient estimates obtained from (2) and (3) above.
6. Report the fixed effect (value) of each country that is obtained from (3) above.
7. Decide which method you will use between (1) and (3) above using Partial F-test at 10% significance level (use p-value approach).