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In the hierarchical normal model, does shrinkage occur only when the variance between groups is constant?

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quant-research
data-analyst
Technical

Consider the rationale behind using hierarchical models and the concept of shrinkage, which often aims to improve estimates by pooling information. Think about the role variance plays in different levels of the hierarchy and how this might impact the shrinkage effect. Remember to consider both within-group and between-group variances when formulating your answer.

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