- #1
Usagi
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Interpretation of estimated coefficients
- MHB
- Thread starter Usagi
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In summary, the conversation discusses a linear model and the interpretation of the regression output from Eviews 7. The coefficient for the distance term is expected to be negative, indicating a decline in trade between countries with increasing distance. This coefficient represents the rate at which trade varies with distance. The speaker's concern is whether their interpretation is correct and whether they should list out all other variables rather than using the phrase "all else constant." The other person responds by stating that too much pedantry can hinder understanding and clarifies that the coefficient represents the partial derivative of trade flow with respect to distance.
- #2
CaptainBlack
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Usagi said:
Is this a linear model?
If so you expect the coefficient for the distance term be negative, other things being equal you expect the trade between the countries to decline with increasing distance. The coefficient is the rate at which trade varies with distance.
CB
- #3
Usagi
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Oh yeah sorry I forgot to add (yes it is a linear model), but attached is the regression output from Eviews 7:
My main concern is whether my wording for the interpretation is correct or not because my teacher told me to be very pedantic when giving an interpretation and rather than saying "all else constant" I have to list out all the other variables.
Thanks :)
My main concern is whether my wording for the interpretation is correct or not because my teacher told me to be very pedantic when giving an interpretation and rather than saying "all else constant" I have to list out all the other variables.
Thanks :)
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- #4
CaptainBlack
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Usagi said:
Too much pedantry is the enemy of understanding.
It is the partial derivative of the trade flow with respect to distance.
CB
Last edited:
- #5
CellCoree
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The estimated coefficients in this image represent the relationship between the independent variable (x) and the dependent variable (y). The coefficient of x is estimated to be 0.5, which means that for every unit increase in x, y is estimated to increase by 0.5 units. This indicates a positive relationship between x and y.
The intercept coefficient of 2 represents the estimated value of y when x is equal to 0. This means that even if x is not present, y is still estimated to have a value of 2. In this case, it is important to consider the context of the data and determine if this is a meaningful value for y when x is equal to 0.
The p-value of 0.001 for the coefficient of x indicates that this relationship between x and y is statistically significant, meaning it is unlikely to have occurred by chance. This suggests that there is a strong relationship between x and y.
It is important to note that these coefficients are estimated values and may not accurately represent the true relationship between x and y. Further analysis and experimentation may be needed to confirm these findings. Additionally, the interpretation of these coefficients should also consider the limitations of the data and any potential confounding factors that may influence the relationship between x and y.
FAQ: Interpretation of estimated coefficients
1. What is the purpose of interpreting estimated coefficients?
The purpose of interpreting estimated coefficients in a statistical model is to understand the relationship between the independent and dependent variables. This allows us to make predictions and draw conclusions about the data.
2. How do I interpret the estimated coefficient?
The estimated coefficient represents the change in the dependent variable for every one unit change in the independent variable, while holding all other variables constant. It can be interpreted as the slope of the line in a linear regression model.
3. What does a positive estimated coefficient indicate?
A positive estimated coefficient indicates a positive relationship between the independent and dependent variables. This means that as the independent variable increases, the dependent variable also increases.
4. What does a negative estimated coefficient indicate?
A negative estimated coefficient indicates a negative relationship between the independent and dependent variables. This means that as the independent variable increases, the dependent variable decreases.
5. What does it mean if the estimated coefficient is close to zero?
If the estimated coefficient is close to zero, it means that there is little to no relationship between the independent and dependent variables. This could indicate that the independent variable has no impact on the dependent variable, or that there are other factors at play that are influencing the relationship.