Panel Data Regression

A panel data set contains observations collected from randomly selected subjects from a large population and recorded over a fixed time frame. Panel data is a type of longitudinal data resulting from an observational study.

The main goal of a panel data regression analysis is to study the impacts predictor variables on a response variable, while controlling for heterogeneity, which is a latent, linear, subject-specific effect. A random effects panel regression model treats the heterogeneity as a random effect. An additional goal, which distinguishes panel data analysis from a typical linear mixed effects model analysis for experimental data, is to estimate the latent effects.