Based on few studies on comparison of panel data models and exploring the eveiws and stata help I have come across a tentative flow chart showing the symptoms which will lead to a particular model selection. Since it is a tentative flow chart any suggestions are welcomed.

Sources:

- Eberhardt, M. and Francis, T. (2010) Productivity Analysis in Global Manufacturing Production,
*Economics Series Working Papers 515*, University of Oxford, Department of Economics - Eberhardt, M. (2012). Estimating panel time-series models with heterogeneous slopes.
*The**Stata Journal*,*12*(1), 61-71. - Gengenbach, C., Palm, F. C., & Urbain, J. P. (2005).
*Panel cointegration testing in the presence of common factors*. METEOR, Maastricht research school of Economics of Technology and Organizations. - Pesaran, M. H. and Ron, P. S. (1995). Estimating long-run relationships from dynamic heterogeneous panels.
*Journal of Econometrics*, 68(1), 79-113. - Pesaran, M. H. (2006). Estimation and inference in large heterogeneous panels with a multifactor error structure.
*Econometrica*,*74*(4), 967-1012. - Saikkonen, P. (1991) Asymptotically efficient estimation of cointegration regressions.
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*Econometrica, 38*(2), 311-323. - Stata Help Manual
- Eviews Help Manual

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my suggestions are:first the clasification should be based on static, dynamic and nonstationary panels.second, in the place where you stated hausman test you included pols but the little i knew hausman test choose the suitability between FE and RE alone, but BF LM test does between POLS and RM. I stand to be corrected if i made mistakes

thank you for your suggestion, yes i thought of making it in the bases of static, dynamic and non stationary panels, but instead of that I used the assumptions which these models are covering. Hopefully I will make another.

Actually the diagram is made such a way that it is assumed that there is hetroscedasticity before selecting FE or RE that is why in such case doing LM test is not necessary. Yes if I stay within the static model system then I would have explained LM or Redundant Cross section test too.

Reblogged this on deosaiplateau and commented:

The Most Condensed yet Comprehensive Flow Chart for PANEL ANALYSIS

it was very a detail chart to know about panel data analysis but kindly explain it with small notes so that students who are not much familiar with econometrics can easily understand

see http://www.econistics.com where I have uploaded some video tutorials for learning basic concepts