Testing for heteroskedasticity and serial correlation in a random effects panel data model

A-Tier
Journal: Journal of Econometrics
Year: 2010
Volume: 154
Issue: 2
Pages: 122-124

Authors (3)

Baltagi, Badi H. (Syracuse University) Jung, Byoung Cheol (not in RePEc) Song, Seuck Heun (not in RePEc)

Score contribution per author:

1.341 = (α=2.01 / 3 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper considers a panel data regression model with heteroskedastic as well as serially correlated disturbances, and derives a joint LM test for homoskedasticity and no first order serial correlation. The restricted model is the standard random individual error component model. It also derives a conditional LM test for homoskedasticity given serial correlation, as well as, a conditional LM test for no first order serial correlation given heteroskedasticity, all in the context of a random effects panel data model. Monte Carlo results show that these tests along with their likelihood ratio alternatives have good size and power under various forms of heteroskedasticity including exponential and quadratic functional forms.

Technical Details

RePEc Handle
repec:eee:econom:v:154:y:2010:i:2:p:122-124
Journal Field
Econometrics
Author Count
3
Added to Database
2026-01-24