 In econometrics, random effects models are used in panel analysis of hierarchical or panel data when one assumes no fixed effects (it allows for individual effects).The random effects model is a special case of the fixed effects 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).