(Requires Appendix Material)When the Fifth Assumption in the Fixed Effects

question 5

Multiple Choice

(Requires Appendix material) When the fifth assumption in the Fixed Effects regression (cov (uit,uis Xit,Xis) = 0 for t ≠ s) is violated,then

• A)using heteroskedastic-robust standard errors is not sufficient for correct statistical inference when using OLS.
• B)the OLS estimator does not exist.
• C)you can use the simple homoskedasticity-only standard errors calculated in your regression package.
• D)you cannot use fixed time effects in your estimation.

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A fundamental arithmetic operation where two or more numbers are added together to get a sum.

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