The PANEL Procedure

Two-Way Fixed-Effects Model

The specification for the two-way fixed-effects model is

\[  u_{it}={\gamma }_{i}+{\alpha }_{t} + {\epsilon }_{it}  \]

where the ${{\gamma }_{i}}$s and ${{\alpha }_{t}}$s are nonrandom parameters to be estimated.

If you do not specify the NOINT option, which suppresses the intercept, the estimates for the fixed effects are reported under the restriction that ${{\gamma }_{N}=0}$ and ${{\alpha }_{T}=0}$. If you specify the NOINT option to suppress the intercept, only the restriction ${{\alpha }_{T}=0}$ is imposed.