In the Fixed Effects regression model, using (n - 1)binary variables for the entities, the coefficient of the binary variable indicates A)the level of the fixed effect of the i^th entity. B)will be either 0 or 1. C)the difference in fixed effects between the i^th and the first entity. D)the response in the dependent variable to a percentage change in the binary variable.

Question

Quizplus · Accepted Answer

The coefficient of the binary variable in a Fixed Effects model represents the difference in fixed effects between the i^th entity and the reference entity, which is typically the first entity.

In the Fixed Effects Regression Model, Using (N - 1)binary