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how to know if random factors are significant?

On 02/04/2008, John Maindonald <john.maindonald at anu.edu.au> wrote:
I think this is a question of strategy. Leonel did put emphasis on the
random effect, and he might just be interested in the size and
significance of the random effect rather than the fixed effects.
Estimating and testing the random effect seems reasonable to me in
this case, although confidence intervals, as you mention below also
provides good inference.

It is always possible to discuss how much non-data information to
include in an analysis and I believe the answer depends very much on
the purpose of the research. If the research question regards the size
and "existence" of the variance of 'Site', then he might conclude that
it is so small compared to other effects in the model/data, that it
has no place in the model.

I think the question regarding "existence" of some effect can be
misleading in many cases, because one can always claim that any effect
is really there, and had we observed enough data, we would be able to
estimate the effect reliably. Leaving too many variables in the model
on which there is too little information also results in bias in
parameter estimates, so it is a trade off. We often speak of
appropriate models, but the appropriateness depends on the purpose -
do we seek inference for a specific (set of) parameter(s), the system
as a whole or do we want to use it for prediction?

/Rune