Hi,

What is the difference between a fixed effect model and random effect model

when the data have a multilevel structure, individuals within countres (2 level for example)

if I have Y as a continuous depedent variable and X1 a categorical variable representing countries (10 countries for example), and X2,X3 are 2 continuous variables

What will be the difference between Model1 (considering X1 as a set of dummy variables )

Model1: Y= X1 +X2+X3 +X1*X2+X1*X2 + e

e: individuals residulas

Model 2: Y= X2+X3 +v1*X2+w1*X2 + u1+e

u1,v1 and w1 country residual (random intercept and random slope)

Model 2: which includes the random effect of X1 using the proc mixed procedure for example?

Thanks in advance for your comments

Adel

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