4

Depends on a trend. Trends come generally in two categories: Deterministic trend - this can be controlled for using various methods. For example, in panel regression you could include time fixed effects that would correct for an effect of each time period on all firms and hence should control for a trend in data. This would look like this: $$y_{it} = \beta_{...


4

Yes it is "allowed". Econometrically it is not a problem. The real question is how useful such a model is for your setting and that will depend on your exact research question, variables and data.


3

In short, because AIC takes the log of the max value of the likelihood function. Except under strong conditions there is no a priori reason to assume that these values will be the same after log-transforming your model. In fact, a priori one should assume they will not be the same, since one of the reasons people log-transform their models is to change the ...


3

Actually there is no single agreed upon definition of low middle and high class. For example, Pew research center uses the following definitions: “Pew Research defines middle-income Americans as those whose annual household income is two-thirds to double the national median. For a family of three, that ranges from \$42,000 to \$126,000 in 2014 dollars. ...


3

The difference is that the first regression is unbiased only if you can assume that high school GPA and ACT score are orthogonal on each other $cov(x,z)=0$ where $x$ is shortcut for high school GPA and $z$ for ACT score. Or if you can assume the second variable ATC score does not affect the dependent variable at all $\beta_2=0$. This is because in simple ...


2

I have spent three days thinking about how to answer your question. I still haven't really decided how it should be answered, so this answer is more in the way of a set of observations. I can readily imagine a formal treatment of general linear models or limited dependent variables models could do better than this answer. The first thing I would observe ...


1

If you could include the source(s) you were talking about that would be great. Without further info, my initial guess is that the Q4/Q4 means you compare GDP in 2018Q4 to GDP in 2017Q4. Y/Y means you compare GDP in the whole year of 2018 to that of 2017. Upon further inspection, if you take a look at the US's real GDP, you'd get the following: Growth in ...


1

Well first of all the story why we only record final consumption is not completely straight - it’s not because we only care about activity of “real person” or consumer. But because counting it all the way would mean we double count the value of the good. For example imagine the following situation. A wood is produced and sold for 15\$ to furniture company ...


1

It is allowed in a sense it does not violate any assumption of the OLS estimator but it is also unlikely that you would need such a specification for a model. If you include $log(x_2)$ in model specification that means you are trying to control for the fact that there is some exponential relationship between $y$ and $x$ like $y=x^b$ and taking logs of $x^b$ ...


1

a) not sure what exactly you mean here by probability distribution but if you mean the distribution of potential Y given the distribution of estimated coefficient b and a it would be correct, although usually we look at expectation to get single number than on distribution in which case it would be $E(Y|X)$ b) is correct


Only top voted, non community-wiki answers of a minimum length are eligible