Scatterplot in a second regression (ANALYSIS)

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Scatterplot in a second regression (ANALYSIS)

Postby alardel » Sat Mar 10, 2018 11:56 pm

I am trying to analyse the results that I get from regressing a variable (in this case investment) on a constant and an independent variable (GDP). When I run my first regression, I use the least-squares command on lagged variables: ls log(Investment) c log(GDP) and I see that there is a considerable serial correlation between these two variable when checking the scatterplot.

However, when I run a second regression taking differentials, using this command: ls dlog(Investment) c dlog(GDP) and I plot the scatterplot, I see that it everything is more spread out and doesn't seem like it's highly correlated. From an analytic point of view, should I really consider the second scatterplot for analysis?

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