Random Effects (The Effect, Videos on Causality, Ep 47)

[@GabrielleYadventuremore]

hi Professor! Thank you so much for the great video and book! This may be an obvious question, but i am really curious to know: can you add variable that explained the btw variation to make it still a fixed-effect model? The book & the video both say "fixed effect model" is the same as a regular linear regression model, and since linear regression model can be Y = a1x1 + a2x2 + .... anXn + b, will fixed effect model has any limitation on what fixed-effect variables it can take (i.e, categorical vs. continuous variable)? will you say a linear regression model with categorical variables can be seen as a fixed-effect model?

[@NickHuntingtonKlein]

Thanks! And yep, no reason you can't have categorical variables in a fixed-effect model. In fact, if you estimate fixed effects by including a set of binary indicators, the fixed effects themselves are in there as a categorical variable.

[@GabrielleYadventuremore]

Thanks for the quick response! that's what i was thinking too about the categorical variable. I assume it is also ok to include continuous variables, right? @@NickHuntingtonKlein

[@NickHuntingtonKlein]

@@GabrielleYadventuremore correct, yes