The Choice Between Fixed and Random Effects Models: Some Considerations for Educational Research

36 Pages Posted: 1 Nov 2010  

Paul Clarke

University of Bristol

Claire Crawford

Institute for Fiscal Studies

Fiona Steele

London School of Economics & Political Science (LSE)

Anna F. Vignoles

London School of Economics & Political Science (LSE)

Abstract

We discuss fixed and random effects models in the context of educational research and set out the assumptions behind the two approaches. To illustrate the issues, we analyse the determinants of pupil achievement in primary school, using data from the Avon Longitudinal Study of Parents and Children. We conclude that a fixed effects approach will be preferable in scenarios where the primary interest is in policy-relevant inference of the effects of individual characteristics, but the process through which pupils are selected into schools is poorly understood or the data are too limited to adjust for the effects of selection. In this context, the robustness of the fixed effects approach to the random effects assumption is attractive, and educational researchers should consider using it, even if only to assess the robustness of estimates obtained from random effects models. When the selection mechanism is fairly well understood and the researcher has access to rich data, the random effects model should be preferred because it can produce policy-relevant estimates while allowing a wider range of research questions to be addressed. Moreover, random effects estimators of regression coefficients and shrinkage estimators of school effects are more statistically efficient than those for fixed effects.

Keywords: fixed effects, random effects, multilevel modelling, education, pupil achievement

JEL Classification: C52, I21

Suggested Citation

Clarke, Paul and Crawford, Claire and Steele, Fiona and Vignoles, Anna F., The Choice Between Fixed and Random Effects Models: Some Considerations for Educational Research. IZA Discussion Paper No. 5287. Available at SSRN: https://ssrn.com/abstract=1700456

Paul Clarke

University of Bristol ( email )

University of Bristol,
Senate House, Tyndall Avenue
Bristol, BS8 ITH
United Kingdom

Claire Crawford (Contact Author)

Institute for Fiscal Studies ( email )

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

Fiona Steele

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Anna F. Vignoles

London School of Economics & Political Science (LSE) ( email )

Centre for Economic Performance (CEP)
Houghton Street
London WC2A 2AE
United Kingdom

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