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Econometrics is the application of statistical methods to economic data for various purposes such as of testing hypotheses, infering causal relationships and forecasting future trends. Only use this tag for questions relating to the theoretical aspect of an econometric technique.

1 vote

Which measure to check in analysis (p-values or $R^2$)?

Well, adjusted R2 has more merit than R2. R2 will always rise (or at least stay the same) as you add more variables (even if the variables are not statistically significant). Thus in theory you could …
Robert Brown's user avatar
0 votes

Which measure to check in analysis (p-values or $R^2$)?

If you want to forecast it is common practice to split your sample up into two parts - the "estimation sample" and the "forecast sample". The estimation sample is used to, you guessed it, estimate you …
Robert Brown's user avatar
2 votes
0 answers
134 views

Framing effects and the use of subjective wellbeing measures in behavioural

In my first foray into behavioural economics I have encountered two themes; - Self-reported subjective wellbeing (SWB) is commonly used as a measure of wellbeing. Survey based SWB measures are frequen …
Robert Brown's user avatar
2 votes
1 answer
326 views

Appropriate estimator for FDI "gravity" model

I am trying to model Foreign Direct Investment (FDI) flows and am facing several issues; There is the well-known condition that under heteroskedasticity log-linearized OLS models are biased and incon …
Robert Brown's user avatar
6 votes
1 answer
591 views

Omitted variables in gravity model

I'm trying to construct a gravity model for EU trade flows using a panel dataset, but am suffering from what appears to be a persistent omitted variable problem. My residuals display a queer log-like, …
Robert Brown's user avatar