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Can you first difference dummy variables?
You can always difference a dummy variable. When you difference a ‘step’ dummy variable it actually becomes a pulse dummy variable, whereas when you difference a pulse dummy it becomes positive/negative [0 0 0 1 -1 0 0].
Can you change the dependent or independent variable?
(Independent variable) causes a change in (Dependent Variable) and it isn’t possible that (Dependent Variable) could cause a change in (Independent Variable).
Can you run a regression with one variable?
With usual regression you cannot do this as you need one variable on the left side of your equation. There are some data reduction techniques which reduce the dependent variables to one quantity and calculate the correlation between the redcued quantities e.g. canonical correlation and partal least suqares regression.
Are binary variables stationary?
The binary dummy variable (Bernoulli r.v.) you refer too will be non-stationary only if you specify a priori that its probability of occurring in each time period is not constant (its specific realization to which you refer, does not affect this a priori assumption).
How are first differences and lagged variables used in regression?
I am trying to replicate an empirical paper and therefore I am trying to understand the author’s regression. He is using first differences for all variables, a lagged dependent variable as an additional regressor and logarithms for some of the variables.
Do you treat proportion as a dependent variable in regression?
If you can assume a linear model, it will be much easier to do, say, a complicated mixed model or a structural equation model. If it’s just a single multiple regression, however, you should look into one of the other methods. A second approach is to treat the proportion as a binary response then run a logistic or probit regression.
Do you think this is the right way to do regression?
He is using first differences for all variables, a lagged dependent variable as an additional regressor and logarithms for some of the variables. Do you think that this is the right way to do it or can anyone help me to get the first differences?
How is dependent variable measured in Tobit regression?
The dependent variable is measured as the proportion of area under rice cultivation (Area under rice cultivation by household i/Total area of land under all crop production by the same household i). After running the tobit regression, I had a negative pseudo r squared value which I believe is not good result.