^{4}While in the fixed effect model a dummy variable is introduced for N - 1 spatial unit or T - 1 time
periods (to avoid perfect multicollinearity), in random effects model, μ_{i} and ξ_{T} are assumed to
be i.d.d. random variables, independent from each other, with zero mean and variance σ_{μ}^{2} and
σ_{ξ}^{2}.