## What is Hausman test Stata?

stata.com. hausman is a general implementation of Hausman’s (1978) specification test, which compares an estimator ̂θ1 that is known to be consistent with an estimator ̂θ2 that is efficient under the assumption being tested.

**How do you interpret Hausman results?**

Test Results Interpreting the result from a Hausman test is fairly straightforward: if the p-value is small (less than 0.05), reject the null hypothesis. The problem comes with the fact that many versions of the test — with different hypothesis and possible conclusions — exist.

### What does Estat Overid do?

estat overid provides tests of overidentifying restrictions. For the 2SLS estimator, Sargan’s and Basmann’s chi-squared tests are available, as is Wooldridge’s robust score test.

**How do you choose between fixed and random effects?**

The most important practical difference between the two is this: Random effects are estimated with partial pooling, while fixed effects are not. Partial pooling means that, if you have few data points in a group, the group’s effect estimate will be based partially on the more abundant data from other groups.

## How do you test if the instrument is exogenous?

The overidentifying restrictions test (also called the J -test) is an approach to test the hypothesis that additional instruments are exogenous. For the J -test to be applicable there need to be more instruments than endogenous regressors.

**How do you detect endogeneity?**

So estimate y=b0+b1X+b2v+e instead of y=b0+b1X+u and test whether coefficient on v is significant. If it is, conclude that X and error term are indeed correlated; there is endogeneity. Note: This test is only as good as the instruments used and is only valid asymptotically.

### Are fixed effects dummy variables?

A fixed effect model is an OLS model including a set of dummy variables for each group in your dataset.