# Implementation Choices¶

While the implementation of the panel estimators is similar to Stata, there are some differenced worth noting.

## Clustered Covariance with Fixed Effects¶

When suing clustered standard errors and entity effects, it is not necessary to adjust for estimated effects. `PanelOLS`

attempts to detect when this is the case and automatically adjust the degree of freedom. This can be overridden using by setting the fit option `auto_df=False`

and then changing the value of `count_effects`

.

## R2 definitions¶

The \(R^2\) definitions are all designed so that the reported value will match the original model using the estimated parameters. This differs from other packages, such as Stata, which use a correlation based measure which ignores the estimated intercept (if included) and allows for affine adjustments to estimated parameters. The main reported \(R^2\) (`rsquared`

in returned results) is always the \(R^2\) from the actual model fit, after adjusting the data for:

weights (all estimators)

effects (

`PanelOLS`

)re-centering (

`RandomEffects`

)within entity aggregation (

`BetweenOLS`

)differencing (

`FirstDifferenceOLS`

)