Solving Problems in the Panel Regression Model for Truncated
Dependent Variables: A Constrained Optimization Method
5.1 Summaries of the Findings
The previous analysis can be summarized with the following findings: (1) Results of panel regression are sensitive to different centering methods in model specification, (2) Without applying constrained optimization, panel regression is likely to suffer from theoretical boundary violations, (3) Application of constrained optimization in panel regression greatly alters the results in the least squares, as well as maximum likelihood paradigm, (4) Despite the fact that constrained optimization can solve the boundary violation problem with a least-squares or maximum-likelihood estimation, the former only gives a conditional solution, while the latter achieves a complete solution, (5) Within the maximum likelihood paradigm, the demeaning bias only causes a marginal difference in a panel regression, (6) In comparison to the panel regression that applies constrained optimization, the current model tends to generate false significance results.
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