It Is Advisable to Use Clustered Standard Errors in Panel

question 25

Multiple Choice

It is advisable to use clustered standard errors in panel regressions because

• A)without clustered standard errors, the OLS estimator is biased
• B)hypothesis testing can proceed in a standard way even if there are few entities (n is small)
• C)they are easier to calculate than homoskedasticity-only standard errors
• D)the fixed effects estimator is asymptotically normally distributed when n is large

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Definitions:

Nociception

The sensory nervous system's response to potentially harmful stimuli, signaling pain to the brain.

Nociception

The sensory nervous system's response to certain harmful or potentially harmful stimuli.

Dull Pressure

A physical sensation often described in medical contexts as a consistent, moderate intensity force or weight felt in a particular area of the body.

Nociception

The sensory nervous system’s response to potentially harmful stimuli, leading to the perception of pain.