Search found 3 matches

by ErikJosephine
Sat Apr 27, 2013 6:10 am
Forum: Econometric Discussions
Topic: Is Multicollinearity important?
Replies: 4
Views: 6990

Re: Is Multicollinearity important?

Btw, there is one more thing I wonder about. I found evidence of both trend-, and difference stationarity but when I adjust for trend stationarity (by adding a trend/time variable) I still get high correlation between my explanatory variables, as high as 0,9..! Should I still care about this since I...
by ErikJosephine
Sat Apr 27, 2013 6:04 am
Forum: Econometric Discussions
Topic: Is Multicollinearity important?
Replies: 4
Views: 6990

Re: Is Multicollinearity important?

Thanks a lot for your answer!! I want to interpret the parameter so that's an increase in parameter uncertainty I can't afford. Im using a consumer price index in this regression. Since it's elasticities I want to measure Im afraid I have to correct the Multicollinearity so I can know with certainty...
by ErikJosephine
Fri Apr 26, 2013 5:26 am
Forum: Econometric Discussions
Topic: Is Multicollinearity important?
Replies: 4
Views: 6990

Is Multicollinearity important?

Hello! I have a question. Im doing a double log regression to find a price-elasticity on which we are gonna base a lot of further calculations on. I found that my material suffers from multicollinearity so I tested for the VIF and it showed a value of 85(!) and R^2=98,9845 when I tested the price-el...

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