I execute the “xtset” command, and then STATA can internally perform any calculations relevant for estimation, including adjustments for serial correlation necessary for RE. For my subsample of
workers, I want to know the impact of education on the natural log of wages. I use STATA to estimate OLS and RE models. For the RE model, I must use the “xtreg” command and specify the “re” option instead of using the standard “regress” or “reg” commands.