What does "Fixed-effects Model" mean?

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A fixed-effects model is a statistical method used to analyze data that is collected from multiple sources or groups. This model assumes that the differences between these sources or groups can be accounted for by specific factors that do not change over time.

In simpler terms, when researchers want to understand how certain factors relate to each other while controlling for differences specific to each group, they can use a fixed-effects model. This helps to isolate the effect of the main variables of interest by keeping the influence of other factors constant.

For example, if a researcher is studying how a new teaching method impacts student performance across several schools, the fixed-effects model can help them focus on the teaching method itself while accounting for the unique characteristics of each school, such as location or resources.

This approach is useful in many fields, including economics, social sciences, and health studies, as it provides clearer insights by limiting distractions from other variables that might confuse the results.