On Fri, 28 Apr 2000, 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
One is always at liberty to make additional assumptions, especially if
there are some useful purposes to be served thereby. The assumption that
predictors are uncorrelated would be such an additional assumption. It
is not necessary for any known purpose in MLR qua MLR; it may be
necessary (though frankly I can't think why, but then I'm not an
econometriciean), or perhaps useful, in some econometric models.
I _am_ curious, though: If one is in the midst of a real-world problem
of the kind that Professor Gujarti would wish to address, and the real
predictors one has ARE correlated, what does one do? Throw up one's
hands in despair and wail, "It can't be done!" ?
-- DFB.
------------------------------------------------------------------------
Donald F. Burrill [EMAIL PROTECTED]
348 Hyde Hall, Plymouth State College, [EMAIL PROTECTED]
MSC #29, Plymouth, NH 03264 603-535-2597
184 Nashua Road, Bedford, NH 03110 603-471-7128
===========================================================================
This list is open to everyone. Occasionally, less thoughtful
people send inappropriate messages. Please DO NOT COMPLAIN TO
THE POSTMASTER about these messages because the postmaster has no
way of controlling them, and excessive complaints will result in
termination of the list.
For information about this list, including information about the
problem of inappropriate messages and information about how to
unsubscribe, please see the web page at
http://jse.stat.ncsu.edu/
===========================================================================
