Fixed effects model

A fixed effects model is a statistical method used to analyze data that involves multiple observations over time or across different groups, such as individuals, companies, or countries. It assumes that each group has unique characteristics that do not change over time and that these characteristics may influence the outcomes being studied. By controlling for these group-specific factors, the model isolates the effect of variables that do change, providing a clearer understanding of how specific factors influence the result within each group. Essentially, it accounts for unchanging differences across groups to focus on the effects of variables of interest.