Construction of the causal model - regression analysis, Managerial Economics

Assignment Help:

Q. Construction of the causal model - regression analysis?

The construction of an explanatory model is a crucial step in the regression analysis. It should be defined with reference to the action theory of intervention. It is likely that different kinds of variable exist. In a number of cases, they may be specially created, for instance to take account of the fact that an individual has benefited from support or not (a dummy variable, taking values 0 or 1). A variable can also represent an observable characteristic (having a job or not) or an unobservable one (probability of having a job). The model may suppose that a particular variable develops in a linear, logarithmic, exponential or other way. All the explanatory models are constructed on the foundation of a model, like the following, for linear regression: 

Y = β0 + β1X1 + β2X2 + .... + βkXk + ε, where

Y is the change that programme is primarily supposed to produce (for example employment of trainees)

X1-k are independent variables likely to describe the change.

β0-k are constants and 

ε is the error term  

Phenomena of co-linearity weaken the explanatory power. For instance, when questioning women about unemployment, if they have experienced periods of previous unemployment that are systematically longer than those of men, it won't be possible to separate the influence of the two explanatory factors: gender and duration of previous unemployment.


Related Discussions:- Construction of the causal model - regression analysis

Search and matching model, Search and Matching Model It  should  be  c...

Search and Matching Model It  should  be  clear  to  you  fiom  the  earlier section  that  there  are  a  variety  of models under the rubric of  search theory.  In  this sec

Central characteristics of simon satisfying behaviour model, Q. Central cha...

Q. Central characteristics of Simon satisfying behaviour model? The pattern of policy commitments which result from the bargaining process can be seen to be a specification of

Pilgrim Bank Case, Your discussion assignment this week is associated with ...

Your discussion assignment this week is associated with the Pilgrim Bank case. Using the attached file, answer the following questions: A. Is there a difference in profitability ac

Price output determination , Discuss the price output determination using p...

Discuss the price output determination using profit maximization under perfect  competition in the short run.

Assignment, Marris constraints of growth maximisation

Marris constraints of growth maximisation

Maximisation model, write a note on marris growth maximising model?

write a note on marris growth maximising model?

What is the equilibrium in the labor market, What is the equilibrium in the...

What is the equilibrium in the labor market? Explain briefly. Equilibrium in the Labor Market a. The market labor of demand curve is the horizontal total of the individual l

Cheapening of materials and equipments, Q. Cheapening of Materials and Equi...

Q. Cheapening of Materials and Equipments? Expansion of an industry increases the demand for different kinds of materials and capital equipments. This will result in large scal

Principles, what is the full concept of discounting principles of manageria...

what is the full concept of discounting principles of managerial economics ?

Principles, Give some examples for marginal and incremental principle

Give some examples for marginal and incremental principle

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd