1.

Diagnostics: using n = 10 cross-sectional units

Fixed effects estimator

allows for differing intercepts by cross-sectional unit

coefficient std. error t-ratio p-value

-------------------------------------------------------------------------
const −27956.5 8776.69 −3.185 0.0035 ***
Country 6507.24 1058.42 6.148 1.23e-06 ***
Landareasqkm 0.00410462 0.00389741 1.053 0.3013
Population −0.000750739 0.000133546 −5.622 5.09e-06 ***
Republic 69970.7 9805.80 7.136 9.16e-08 ***
Monarchy 28227.0 4933.60 5.721 3.88e-06 ***
Laborforce 0.00128620 0.000253769 5.068 2.30e-05 ***
EducationofGDP −244.527 446.053 −0.5482 0.5879
HealthofGDP −544.194 952.512 −0.5713 0.5723
MilitaryofGDP −6986.39 1864.15 −3.748 0.0008 ***
AgricultureofGDP −2013.18 158.973 −12.66 4.14e-013 ***
Infrastructureof~ 207.138 95.0875 2.178 0.0380 **
TourismofGDP 1743.50 697.463 2.500 0.0186 **

Residual variance: 2.74039e+008/(50 - 22) = 9.7871e+006

Joint significance of differing group means:

F(9, 28) = 8.16228 with p-value 7.76286e-006
(A low p-value counts against the null hypothesis that the pooled OLS model
is adequate, in favor of the fixed effects alternative.)

Omitting group means regression: insufficient degrees of freedom

2.
Model 2: Fixed-effects, using 50 observations
Included 10 cross-sectional units
Time-series length = 5
Dependent variable: GDPpercapitacurrentUS

Coefficient Std. Error t-ratio p-value

const −27956.5 8776.69 −3.185 0.0035 ***
Country 6507.24 1058.42 6.148 <0.0001 ***
Landareasqkm 0.00410462 0.00389741 1.053 0.3013
Population −0.00075073 0.000133546 −5.622 <0.0001 ***
9
Republic 69970.7 9805.80 7.136 <0.0001 ***
Monarchy 28227.0 4933.60 5.721 <0.0001 ***
Laborforce 0.00128620 0.000253769 5.068 <0.0001 ***
EducationofGDP −244.527 446.053 −0.5482 0.5879
HealthofGDP −544.194 952.512 −0.5713 0.5723
MilitaryofGDP −6986.39 1864.15 −3.748 0.0008 ***
AgricultureofGDP −2013.18 158.973 −12.66 <0.0001 ***
InfrastructureofGDP 207.138 95.0875 2.178 0.0380 **
TourismofGDP 1743.50 697.463 2.500 0.0186 **
 Mean dependent var 12016.59 S.D. dependent var 17889.97
Sum squared resid 2.74e+08 S.E. of regression 3128.434
LSDV R-squared 0.982526 Within R-squared 0.976621
LSDV F(21, 28) 74.96973 P-value(F) 2.70e-19
Log-likelihood −458.8659 Akaike criterion 961.7317
Schwarz criterion 1003.796 Hannan-Quinn 977.7501
Rho 0.009292 Durbin-Watson 1.564703

 2 no auto correlation
 0 to less than 2 positive auto correlation
 Greater than 2-4 negative auto correlation

4. Joint test on named regressors -

Test statistic: F(12, 28) = 97.4717
with p-value = P(F(12, 28) > 97.4717) = 1.51757e-019

5.
Pesaran CD test for cross-sectional dependence -
Null hypothesis: No cross-sectional dependence
Asymptotic test statistic: z = -1.56933
with p-value = 0.116572
Average absolute correlation = 0.403

6.
Test for differing group intercepts -
Null hypothesis: The groups have a common intercept
Test statistic: F(9, 28) = 8.16228
with p-value = P(F(9, 28) > 8.16228) = 7.76286e-006

7.
Test for normality of residual -
Null hypothesis: error is normally distributed
Test statistic: Chi-square(2) = 6.70351
with p-value = 0.0350228

Frequency distribution for uhat2, obs 1-50

number of bins = 7, mean = -5.54064e-011, sd = 2721.48

interval midpt frequency rel. cum.

< -3087.9 -3957.9 3 6.00% 6.00% **

-3087.9 - -1348.0 -2217.9 13 26.00% 32.00% *********
-1348.0 - 391.99 -477.98 14 28.00% 60.00% **********
391.99 - 2131.9 1262.0 14 28.00% 88.00% **********
2131.9 - 3871.9 3001.9 3 6.00% 94.00% **
3871.9 - 5611.9 4741.9 0 0.00% 94.00%
>= 5611.9 6481.8 3 6.00% 100.00% **
 0.00018
Test statistic for normality: relative frequency
N(-5.5406e-011,2721.5)
Chi-square(2) = 6.704 [0.0350]
0.00016

0.00014

0.00012
Density

0.0001

8e-005

6e-005

4e-005

2e-005

0
-8000 -6000 -4000 -2000 0 2000 4000 6000 8000
uhat2

8.
Distribution free Wald test for heteroskedasticity -
Null hypothesis: the units have a common error variance
Asymptotic test statistic: Chi-square(10) = 121.663
with p-value = 2.32556e-021
Pooled error variance = 5.48078e+006

unit variance
12.56873e+006 (T = 5)
22.36848e+006 (T = 5)
31.15629e+006 (T = 5)
42.58753e+006 (T = 5)
55.86418e+006 (T = 5)
61.07107e+007 (T = 5)
71.17755e+007 (T = 5)
81.03179e+006 (T = 5)
95.13263e+006 (T = 5)
101.16119e+007 (T = 5)