Traditional Culture Encyclopedia - Traditional customs - The difference between two-way fixing effect and space panel
The difference between two-way fixing effect and space panel
1. According to today's headline data, the model assumes different things: the bidirectional fixed effect assumes that each individual and each time has a fixed error term, while the spatial panel assumes that there is spatial correlation in the error term.
2. Different data types: Two-way fixed effect can be applied to horizontal data (that is, cross-country comparison) and vertical data (that is, time series analysis), while spatial panel is suitable for analyzing panel data in any geographical location.
3. The parameter estimation methods are different: the two-way fixed effect fits the model through the virtual variables of individuals and time, while the spatial panel considers the correlation between adjacent areas through the spatial weight matrix.
4. Different model explanations: the two-way fixed effect emphasizes the fixed influence of each individual and each time, while the space panel pays attention to the mutual influence and interaction between adjacent areas.
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