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Could anyone please reply to the above as this may be the final hurdle in solving my problem - thanks.

As has already been mentioned, the best way to achieve this is to create a set of three dummy variables. One for USA (equal to 1 if a transaction is in the USA, and zero otherwise), one for UK (likewise), and one for Continental Europe (likewise). Then estimate the equation Y D_USA D_UK D_CE D_USA*...

Hello everybody, For the past weeks I've been trying to figure out a problem, unsuccessfully thusfar. I have collected data on M&A transactions. I made four datasets: 1. All transactions per month 2. Transactions in the USA per month 3. Transactions in the UK per month 4. Transactions in Contine...

I may have gotten it wrong, but it appears that "ie ia iu ic" is one complete set of dummues and that "le la lu lc" is another. True, but they're not the only ones. I created those dummies to match the values of variable with a region as was suggested earlier. Originally I did n...

That clears it up very quickly. You have included two complete sets of dummies. That's another form of the dummy variable trap. Two? I have four dummy variables (under/over/low/high) but they do not always have opposing values (e.g. under/over, low/high can both be 0). What would you suggest me to ...

You have a better shot of getting someone to look at this if you attach your EViews dataset.

That makes sense. I ran the regressions for the subsets on separate workfiles. The file attached combines all data.

That's more than what I could have asked for. Basically what I've done is running 4 separate regressions for 4 datasets (entire dataset + its three subsets based on region), all consisting of the same variables. Equation: y c interest quantum low high under over I'm trying to figure out whether ther...

ls y DUK DUS DEU DUK*X DUS*X DEU*X Thanks for your suggestion. When I enter equation: y c DUK DUS DEU DUK*X1 DUS*X1 DEU*X1 and so on for al five variables I get the error near singular matrix , also without entering the constant. This is probably because all dummies are mutually exclusive. Starting...

You should be able to find out how to do this by looking up "Chow test" in a good econometrics text. Briefly. Add together the sum of square residuals from all three separate regressions. Let's call this SSR. Then estimate all the data together in a single regression and call the sum of s...

Use more than one dummy. Hi I've been off for a week. Let me explain my problem in more detail. I already have estimation results from my three subsets. Each subset's coefficients differ from the other subsets, but now I need to find out whether these differences are in fact significant, i.e. the c...

Then you can use dummy variables to perform the test manually - simply create a dummy variable for each region and include it in the estimation. Also, please post in the EViews 5 forum in the future. I'm sorry, my bad. Dummies can take values 0 and 1, how then will I be able to test for significant...

A simple method would be to estimate over the entire sample, then use the Factor Breakpoint Test (under View->Coefficient Tests) to test whether there are differences between the sub-samples. Simply enter the series that contains the region data as the factor I don't see that test, I have Eviews 5.0

You can use the Chow breakpoint test under View/Stability tests.

I was under the impression that the Chow test compares the coefficients of the subsets with the entire set, whereas I want to test for differences with one another. This is also possible using Chow?

Hi everybody: I have estimated equation y c b1_X1 b2_X2 b3_X3 b4_X4 b5_X5 for my entire dataset but also (separately) for three subsets, based on region (North America, UK, and Continental Europe). Obviously the coefficients of the explanatory variables differ for each region but I want to find out ...