I've talked a bit about spurious regressions a bit in some earlier posts (here and here). I was updating an example for my time-series course the other day, and I thought that some readers might find it useful.Let's begin by reviewing what is usually m...
Here's something that's very tempting, but it's not a good idea.Suppose that we want to estimate a regression model by OLS. We have a full sample of size n for the regressors, but one of the values for our dependent variable, y, isn't available. Rather...
I began a recent post with the comment:"One thing that a lot of practitioners seem to be unaware of (or they choose to ignore it) is that in many of the common situations where we use regression analysis to estimate elasticities, these e...
In a recent post I discussed some aspects of estimating elasticities from regression models, and the interpretation of these values. That discussion should be kept in mind in reading what follows.One thing that a lot of practitioners seem to be unaware...
A linear regression equation is just that - an equation. This means that when any of the variables - dependent or explanatory - have units of measurement, we also have to keep track of the units of measurement for the estimated regression coefficients....
Good grief! It's March already. You might enjoy:Bajari, P., D. Nekipelov, S. P. Ryan, and M. Yang, 2015. Demand estimation with machine learning and model combination. NBER Working Paper No, 20955.Baur, D. G. and D. T. Tran, 2014. The long-run relation...
When we estimate a regression model, the differences between the actual and "predicted" values for the dependent variable (over the sample) are termed the "residuals". Specifically, if the model is of the form: ...
When we estimate a regression model, the differences between the actual and "predicted" values for the dependent variable (over the sample) are termed the "residuals". Specifically, if the model is of the form: ...
My therapy sessions are actually going quite well. I'm down to just one meeting with Jane a week, now. Yes, there are still far too many log-linear regressions being bandied around, but I'm learning to cope with it!Last year, in an attempt to be helpfu...
When I'm introducing students in my introductory economic statistics course to the simple linear regression model, I like to point out to them that fitting the regression line so as to minimize the sum of squared residuals, in the vertical direction, i...
