Random effects model

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In econometrics, a random effects model, also called a variance components model, is a statistical model where the model effects are random variables. It is a kind of hierarchical linear model, which assumes that the data being analysed are drawn from a hierarchy of different populations whose differences relate to that hierarchy. A random effects model is a special case of a mixed model. Contrast this to the biostatistics definitions, as biostatisticians use "fixed" and "random" effects to respectively refer to the population-average and subject-specific effects (and where the latter are generally assumed to be unknown, latent variables).

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