- The document discusses regression analysis using dummy variables to represent qualitative variables like gender, race, or region. Dummy variables take values of 1 or 0 to indicate presence or absence of a quality.
- It cautions that if a qualitative variable has m categories, only introduce (m-1) dummy variables to avoid perfect collinearity. The omitted category serves as the base for comparisons.
- Regression models containing both quantitative and qualitative variables are called ANCOVA models. They control for the effects of quantitative covariates when examining relationships between dummy and dependent variables.
- An example model examines how public school teachers' salaries vary by region and spending per pupil on education, showing the effect of controlling for the quantitative covari
Econometrics notes (Introduction, Simple Linear regression, Multiple linear r...Muhammad Ali
Econometrics notes for BS economics students
Muhammad Ali
Assistant Professor of Statistics
Higher Education Department, KPK, Pakistan.
Email:Mohammadale1979@gmail.com
Cell#+923459990370
Skyp: mohammadali_1979
Econometrics notes (Introduction, Simple Linear regression, Multiple linear r...Muhammad Ali
Econometrics notes for BS economics students
Muhammad Ali
Assistant Professor of Statistics
Higher Education Department, KPK, Pakistan.
Email:Mohammadale1979@gmail.com
Cell#+923459990370
Skyp: mohammadali_1979
Brief notes on heteroscedasticity, very helpful for those who are bigners to econometrics. i thought this course to the students of BS economics, these notes include all the necessary proofs.
This Presentation is tailor made for those who are willing to get an overview of Econometrics as to what it means, how it works and the methodology it follows.
This theory relies on the market behaviour of the consumer to know about his preferences with regard to the various combinations for the two reactions and responses of the consumer.
Brief notes on heteroscedasticity, very helpful for those who are bigners to econometrics. i thought this course to the students of BS economics, these notes include all the necessary proofs.
This Presentation is tailor made for those who are willing to get an overview of Econometrics as to what it means, how it works and the methodology it follows.
This theory relies on the market behaviour of the consumer to know about his preferences with regard to the various combinations for the two reactions and responses of the consumer.
Chapter 12 - DUMMY PREDICTOR VARIABLES IN MULTIPLE REGRESSION12..docxcravennichole326
Chapter 12 - DUMMY PREDICTOR VARIABLES IN MULTIPLE REGRESSION
12.1 Research Situations Where Dummy Predictor Variables Can Be Used
Previous examples of regression analysis have used scores on quantitative X variables to predict scores on a quantitative Y variable. However, it is possible to include group membership or categorical predictor variables as predictors in regression analysis. This can be done by creating dummy (dichotomous) predictor variables to represent information about group membership. A dummy or dichotomous predictor variable provides yes/no information for questions about group membership. For example, a simple dummy variable to represent gender corresponds to the following question: Is the participant female (0) or male (1)? Gender is an example of a two-group categorical variable that can be represented by a single dummy variable.
When we have more than two groups, we can use a set of dummy variables to provide information about group membership. For example, suppose that a study includes members of k = 3 political party groups. The categorical variable political party has the following scores: 1 = Democrat, 2 = Republican, and 3 = Independent. We might want to find out whether mean scores on a quantitative measure of political conservatism (Y) differ across these three groups. One way to answer this question is to perform a one-way analysis of variance (ANOVA) that compares mean conservatism (Y) across the three political party groups. In this chapter, we will see that we can also use regression analysis to evaluate how political party membership is related to scores on political conservatism.
However, we should not set up a regression to predict scores on conservatism from the multiple-group categorical variable political party, with party membership coded 1 = Democrat, 2 = Republican, and 3 = Independent. Multiple-group categorical variables usually do not work well as predictors in regression, because scores on a quantitative outcome variable, such as “conservatism,” will not necessarily increase linearly with the score on the categorical variable that provides information about political party. The score values that represent political party membership may not be rank ordered in a way that is monotonically associated with changes in conservatism; as we move from Group 1 = Democrat to Group 2 = Republican, scores on conservatism may increase, but as we move from Group 2 = Republican to Group 3 = Independent, conservatism may decrease. Even if the scores that represent political party membership are rank ordered in a way that is monotonically associated with level of conservatism, the amount of change in conservatism between Groups 1 and 2 may not be equal to the amount of change in conservatism between Groups 2 and 3. In other words, scores on a multiple-group categorical predictor variable (such as political party coded 1 = Democrat, 2 = Republican, and 3 = Independent) are not necessarily linearly related to scores ...
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Read| The latest issue of The Challenger is here! We are thrilled to announce that our school paper has qualified for the NATIONAL SCHOOLS PRESS CONFERENCE (NSPC) 2024. Thank you for your unwavering support and trust. Dive into the stories that made us stand out!
Macroeconomics- Movie Location
This will be used as part of your Personal Professional Portfolio once graded.
Objective:
Prepare a presentation or a paper using research, basic comparative analysis, data organization and application of economic information. You will make an informed assessment of an economic climate outside of the United States to accomplish an entertainment industry objective.
How to Make a Field invisible in Odoo 17Celine George
It is possible to hide or invisible some fields in odoo. Commonly using “invisible” attribute in the field definition to invisible the fields. This slide will show how to make a field invisible in odoo 17.
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June 3, 2024 Anti-Semitism Letter Sent to MIT President Kornbluth and MIT Cor...Levi Shapiro
Letter from the Congress of the United States regarding Anti-Semitism sent June 3rd to MIT President Sally Kornbluth, MIT Corp Chair, Mark Gorenberg
Dear Dr. Kornbluth and Mr. Gorenberg,
The US House of Representatives is deeply concerned by ongoing and pervasive acts of antisemitic
harassment and intimidation at the Massachusetts Institute of Technology (MIT). Failing to act decisively to ensure a safe learning environment for all students would be a grave dereliction of your responsibilities as President of MIT and Chair of the MIT Corporation.
This Congress will not stand idly by and allow an environment hostile to Jewish students to persist. The House believes that your institution is in violation of Title VI of the Civil Rights Act, and the inability or
unwillingness to rectify this violation through action requires accountability.
Postsecondary education is a unique opportunity for students to learn and have their ideas and beliefs challenged. However, universities receiving hundreds of millions of federal funds annually have denied
students that opportunity and have been hijacked to become venues for the promotion of terrorism, antisemitic harassment and intimidation, unlawful encampments, and in some cases, assaults and riots.
The House of Representatives will not countenance the use of federal funds to indoctrinate students into hateful, antisemitic, anti-American supporters of terrorism. Investigations into campus antisemitism by the Committee on Education and the Workforce and the Committee on Ways and Means have been expanded into a Congress-wide probe across all relevant jurisdictions to address this national crisis. The undersigned Committees will conduct oversight into the use of federal funds at MIT and its learning environment under authorities granted to each Committee.
• The Committee on Education and the Workforce has been investigating your institution since December 7, 2023. The Committee has broad jurisdiction over postsecondary education, including its compliance with Title VI of the Civil Rights Act, campus safety concerns over disruptions to the learning environment, and the awarding of federal student aid under the Higher Education Act.
• The Committee on Oversight and Accountability is investigating the sources of funding and other support flowing to groups espousing pro-Hamas propaganda and engaged in antisemitic harassment and intimidation of students. The Committee on Oversight and Accountability is the principal oversight committee of the US House of Representatives and has broad authority to investigate “any matter” at “any time” under House Rule X.
• The Committee on Ways and Means has been investigating several universities since November 15, 2023, when the Committee held a hearing entitled From Ivory Towers to Dark Corners: Investigating the Nexus Between Antisemitism, Tax-Exempt Universities, and Terror Financing. The Committee followed the hearing with letters to those institutions on January 10, 202
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An EFL lesson about the current events in Palestine. It is intended to be for intermediate students who wish to increase their listening skills through a short lesson in power point.
1. ECONOMETRICS
LECTURE-18 AND 19
Regression on dummy explanatory variables
– the nature of dummy varable.
Regression with one quantitative variable and
one qualitative variable
2. THE NATURE OF DUMMY VARIABLES
In regression analysis the dependent variable, or
regressand, is frequently influenced not only by ratio
scale variables (e.g., income, output, prices, costs, height,
temperature) but also by variables that are essentially
qualitative, or nominal scale, in nature, such as sex, race,
color, religion, nationality, geographical region, political
upheavals, and party affiliation.
Since such variables usually indicate the presence or
absence of a “quality” or an attribute, such as male or
female, black or white, Catholic or non-Catholic,
Democrat or Republican, they are essentially nominal
scale variables.
3. One way we could “quantify” such attributes is by
constructing artificial variables that take on values of 1
or 0, 1 indicating the presence of that attribute and 0
indicating the absence of that attribute. For example, 1
may indicate that a person is a female and 0 may
designate a male.
Variables that assume such 0 and 1 values are called
dummy variables.Such variables are thus essentially a
device to classify data into mutually exclusive categories
such as male or female.
Dummy variables can be incorporated in regression
models just as easily as quantitative variables. As a
matter of fact, a regression model may contain regressors
that are all exclusively dummy, or qualitative, in nature.
Such models are called Analysis of Variance (ANOVA)
models
4. CAUTION IN THE USE OF DUMMY
VARIABLES
If a qualitative variable has m categories, introduce only
(m- 1) dummy variables. If you do not follow this rule,
you will fall into what is called the dummy variable trap,
that is, the situation of perfect collinearity or perfect
multicollinearity.
The category for which no dummy variable is assigned
is known as the base, benchmark, control, comparison,
reference, or omitted category. And all comparisons are
made in relation to the benchmark category.
The intercept value (β1) represents the mean value of the
benchmark category.
The coefficients attached to the dummy variables in are
known as the differential intercept coefficients because
they tell by how much the value of the category
5. that receives the value of 1 differs from the intercept
coefficient of the benchmark category.
If a qualitative variable has more than one category, as in
our illustrative example, the choice of the benchmark
category is strictly up to the researcher.
There is a way to circumvent dummy variable trap by
introducing as many dummy variables as the number of
categories of that variable, provided we do not introduce
the intercept in such a model.
6. REGRESSION WITH A MIXTURE OF QUANTITATIVE
AND QUALITATIVE
REGRESSORS: THE ANCOVA MODELS
. Regression models containing an admixture of
quantitative and qualitative variables are called analysis
of covariance (ANCOVA) models.
ANCOVA models are an extension of the ANOVA
models in that they provide a method of statistically
controlling the effects of quantitative regressors, called
covariates or control variables, in a model that includes
both quantitative and qualitative, or dummy, regressors.
7.
8. TEACHERS’SALARY IN RELATION TO REGION AND
SPENDING ON PUBLIC SCHOOL PER PUPIL
By maintaining that the average salary of public school
teachers may not be different in the three regions if we
take into account any variables that cannot be
standardized across the regions. Consider, for example,
the variable expenditure on public schools by local
authorities, as public education is primarily a local and
state question.
Yi = β1 + β2D2i + β3D3i + β4Xi + ui
where Yi = average annual salary of public school
teachers in state ($)
Xi = spending on public school per pupil ($)
D2i = 1, if the state is in the Northeast or North Central
= 0, otherwise
D3i = 1, if the state is in the South
= 0, otherwise
9. Yi = 28,694.918 − 2,954.127D2i − 3,112.194D3i +
2.3404Xi
se = (3262.521) (1862.576) (1819.873) (0.3592)
t = (8.795)* (−1.586)** (−1.710)** (6.515)*
R2 = 0.4977
As these results suggest,as public expenditure goes up by a
dollar, on average, a public school teacher’s salary goes up
by about $2.34. Controlling for spending on education, we
now see that the differential intercept coefficient is not
significant for either the Northeast and North Central
region or for the South.