Statistical Analysis Stack Exchange
Statistical Analysis Stack Exchange

Questions tagged [economics]

46 questions
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Inputs not proxying for variance, but nevertheless well-correlated

In a summary of this behavioral economics article, it says Our third finding is that cross-consumer heterogeneity in biases is poorly explained by even a “kitchen sink” of other consumer characteristics, including classical decision inputs,…
Eric Auld
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2SLS approach using lagged dependent variable as an instrument

I was wondering if the lagged dependent variable can be a valid instrument or not. In my data, policy intervention (x) is made depending on the outcome (y) in the past. (not depending on the effect (b) in the past, because they do not measure the…
Yendao Su
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How to test multicollinearity in Fixed Effects Model in R?

I was using plm package in R and run some pooling and fixed effects model. For pooling models I was able to use vif() for getting Variance Inflation Factor, but when I run it for fixed effect model, it showed me the below error: > > vif(modelFE.1.i)…
Aru Bhardwaj
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Using percentage change as a dependent variable?

If I use percentage change as my dependent variable what is the correct modeling method? I am trying to see how the size of a company affects its losses due to COVID-19. I use quarter over quarter change, and size as one of the independent…
Harry Harrington
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Computing an Exponential Moving Average

According to the Wikipedia page on moving averages, "This is also why sometimes an EMA is referred to as an $N$-day EMA. Despite the name suggesting there are $N$ periods, the terminology only specifies the $\alpha$ factor. $N$ is not a stopping…
user345010
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Do insignificant variables result in a specification error?

I am trying to understand omitted variable bais better. I know that it detects irrelevant variables, but are irrelevant variables and insignificant variables synonymous here? If I have a regression with insignificant (p < .05) variables then do I…
rabito
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Using Odds Ratio to Calculate Cost Savings

I am looking for some insight in offering some context to my odds ratios. I did a simple model estimating the relationship between the planting space afforded trees and the presence/absence of sidewalk damage. Working with the model we get the…
Andrew Koeser
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Why does this econ paper include time-invariant demographic measures in a fixed-effect model?

So I'm reading this recently published paper (2020): "Sources of Displaced Workers’ Long- Term Earnings Losses" (American Economic Review), and I'm puzzled why the authors included a "vector of gender, race, and education indicators, interacted with…
AMB1274
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What kind of econometric models would be appropriate to determine the presence of a causal relationship?

I am conducting some econometric research on the impact of austerity on birth rates in the UK. I would be using publicly available data from the UK government covering the number of births per year, local government spending (which will be used as a…
ExploringData
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What is the most suitable classical decomposition model for the time-series graph?

To decompose time series data using the classical decomposition method, we have additive as well as multiplicative model. What is the most suitable decomposition model to be used to decompose the time series data based on the given graph that can be…
Anonymous M
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Maximum likelihood estimate of rate of relative risk aversion in R fails

I try to estimate the relative rate of risk aversion gmma of a CRRA function using R. The likelihood maximisation either does not converge or produces an unrealistic estimate. In order to make the problem I simulated choice data. I suspect a problem…
FicusBenji
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Contradicting Single Index model assumptions

http://www.columbia.edu/~gmg2/4706-00/pdf/lect_05nn.pdf In the above paper there is that given the equation of the single index model, Let $x_m$ denote the market index portfolio we have $\bar R_m=α_m-β_m \bar R _m$ This equations holds for all…
Anna
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Can I use logistic regressions and least squares coefficients in a meta-analysis?

I am trying to write a Economics meta-analysis. The papers that I have collected so far contain a 50/50 split between OLS models and Logistic regressions (coefficients reported as odds ratios). If we assume for simplicity that all the outcome…
os301
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How would I interpret a dummy variable and interaction term in this time series analysis using ARDL?

I'm doing an econometrics paper analyzing the impacts of oil price shocks on GDP growth. In one of my models, I use change in nominal oil prices, a dummy variable representing negative oil price shocks, and an interaction term between the dummy…
econstudent1327
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Behaviour of two variables, where one variable is a ratio of another, in Labour Economics

I am trying to reproduce the result found in an old paper by Harvey S. Rosen, titled "Tax Illusion and the Labor Supply of Married Women Author", using a different dataset. The model that is estimated looks as follows: $$ Hours_j = B_1 Wage_j - B_1…
Tom
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