Hello,
I have got a question concerning the adjusted R-squared.
I estimated an OLS model using X1 X2 D1 D2 as explanatory variables. D1 and D2 are dummy variables. For this model I get an adjusted R-squared of 0.13.
Then I wanted to specify my model and introduced X1D1 and X2D2. Now my adjusted R-squared is reduced to 0.11. What does it get smaller? Should it not always increase the more explanatory variabled I use, as it is the case with R-squared?
Thank you very much
why does adjusted R-squared gets smaller?
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