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:

Lead Arrangement

Reference to the specific configuration or placement of electrodes on the body in medical procedures, particularly electrocardiography (ECG).

Electrodes

Conductive materials used to establish electrical contact with a nonmetallic part of a circuit.

ECG

A medical examination analyzing the heart's electric functionality to detect assorted cardiac disorders.

Sedentary

Pertaining to sitting; inactivity.