Use the data in Section 13.9.7 (the Grunfeld data) to fit the random and fixed effect models.

Question:

Use the data in Section 13.9.7 (the Grunfeld data) to fit the random and fixed effect models. There are five firms and 20 years of data for each. Use the F, LM, and/or Hausman statistics to determine which model, the fixed or random effects model, is preferable for these data.