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How do I estimate the (change) of a variable, as a new X

Posted: Mon May 12, 2014 3:48 pm
by Seeking_Knowledge
Say I wanted to investigate the effect of sugar price changes on several stock prices.

1) How do I add the (change) in the sugar price as an exxplanatory variable?

2) Is this the same thing as a first difference?

3) What if I add the sugar price variable, with all it's values in period 2000 - 2010, how is this different from 1) ?


Re: How do I estimate the (change) of a variable, as a new X

Posted: Mon May 12, 2014 4:38 pm
by startz
Ask yourself whether you want the derivative of the stock price with respect to the sugar price, or the derivative of the stock price with respect to the rate of change of the sugar price between periods.