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Question: 8. In a fixed effects model, we can consider several ways to control for the individual effects w...

Show transcribed image text 8. In a fixed effects model, we can consider several ways to control for the individual effects which may be correlated with the regressors. Three cases being the within estimator, least-squares dummy variable estimator (LSDV) and the first difference estimator. Consider the three methods, show that (a) The within estimator and the LSDV estimator are equivalent. (b) When T 2, the within estimator and the first difference estimator are equivalent

8. In a fixed effects model, we can consider several ways to control for the individual effects which may be correlated with the regressors. Three cases being the within estimator, least-squares dummy variable estimator (LSDV) and the first difference estimator. Consider the three methods, show that (a) The within estimator and the LSDV estimator are equivalent. (b) When T 2, the within estimator and the first difference estimator are equivalent