| Badi Baltagi, Texas A & M University Byoung Cheol Jung, Korea University Seuck Heun Song, Duksung Women's University |
| Simple LM Tests for the Unbalanced Nested Error Component Regression Model |
| Session: C-13-21 Wednesday 16 August 2000 by Baltagi, Badi |
| This paper derives several Lagrange Multiplier tests for the unbalanced nested error component model. These tests extend the earlier work of Breusch and Pagan (1980), Honda (1985), Moulton and Randolph (1989), Baltagi, Chang and Li (1992), Bera and Yoon (1993) and Rahman and King (1998) to the unbalanced nested error component regression model. Monte Carlo experiments are conducted to study the performance of these LM tests. In addition, an empirical illustration is provided applying these tests to the study of productivity of public capital in private production. |