Steve, Thanks for all your advice. You have been extremely helpful and certainly had provided excellent insights to my problem. I'll try to sniff around some more and hope to report some good news soon. ... View more

Steve, I tried using just VARA and VARB (and dropped VARC, VARD and VARE) for the PROC PANEL. model VARA = VARB But still the multicollinearity problem exist! How is that even possible? ... View more

Hi folks, Looks like it is indeed a multicollinearity problem. I replaced my data with random dummy variables and I could run results. Now, how do I deal with this multicollinearity problem... ... View more

Steve, Good that you asked about FIXTWO because there is also a minor issue there which I am not sure if it is related to this Hausman un-calculability. No issues with FIXONE, Pooled OLS, Parks and DaSilva though as far as generating readable results. The PROC PANEL codes for FIXTWO are: *Fixed effects or within estimator; proc panel data=data; id Country Monthyear; model VARA = VARB VARC VARD VARE /FIXTWO; label   VARA = 'Variable A'         VARB = 'Variable B'   VARC = 'Variable C'         VARD = 'Variable D'         VARE = 'Variable E'; run; The output is: Intercept        1     1968.87       158.6      12.41      <.0001    Intercept    VARB              0           0           .        .         .            Variable  B    VARC              1    3.730877      0.9410       3.96      <.0001   Variable C    VARD            1    -0.05416      0.0139      -3.88      0.0001    Variable D    VARE               1    0.003923    0.000224      17.52      <.0001    Variable E You see the similarity in the Hausman Test output and the FIXTWO output for VARB? The log says: "The transformed regression does not have full rank. User should be aware of possible multicollinearity and/or estimability problems before using FixTwo method results." ... View more

Steve, The following is the PROC PANEL CODE for both Fuller-Battese and Wallace-Hussain. Both could not yield any result in the Hausman Test. I have replaced the variables with generic terms for easier reference. Thanks so much for your help in looking into this. *Random effects estimator; proc panel data=data; id Country Monthyear; model VARA = VARB VARC VARD VARE /RANTWO vcomp=fb; label   VARA = 'Variable A'         VARB = 'Variable B'   VARC = 'Variable C'         VARD = 'Variable D'         VARE = 'Variable E'; run; *Random effects estimator; proc panel data=data; id Country Monthyear; model VARA = VARB VARC VARD VARE /RANTWO vcomp=wh; label   VARA = 'Variable A'         VARB = 'Variable B'   VARC = 'Variable C'         VARD = 'Variable D'         VARE = 'Variable E'; run; ... View more

Thank you, I will check out if it is due to multicollineariy and report accordingly. ... View more