Pooled OLS

Summary

Setup

A stationary balanced panel

Pooled OLS

• The linear regression model can be formulated:

$$y_{i,t}=β_1+β_2x_{i,t,2}+…+β_kx_{i,t,k}+ε_{i,t} , i=1,…,n , t=1,…,T$$

• If the explanatory variables are exogenous then OLS will be unbiased and consistent.
• If the error terms are homoscedastic and not autocorrelated then OLS will be efficient.
• OLS is in this case sometimes called pooled OLS .