At 11:09 AM 4/28/00 -0500, EAKIN MARK E wrote:
>
>Besides independent normal errors with mean zero and constant
>variance, some (many?) econometric text books do make the assumption that
>the independent variables are uncorrelated. For example see
>
>Gujarti, Damodar (1988), _Basic Econometrics 2nd edition_, McGraw Hill, p.
>166
first, this would only possibly apply in the inferential situation, using r
to estimate rho ... but has nothing to do with the correlation between X
and Y (r) in the data set at hand and what assumptions are made about the
correlation coefficient ...
and secondly, independent variables are either correlated with each other
(non 0) or not ... thus, only for some specific application ... such as ...
how can we maximize the multiple R between a set of predictors AND a
criterion ... would such a statement make sense ... and there it is not
even an assumption ... just a limiting case for R
sure, for some specific econometric model based on some theory ... one
might assume this to SIMPLIFY THE MODEL but ... that has nothing to do with
independent variables per se
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