I am currently running a simple quadratic model, with and without the
constant (y=a+bx+bx^2) and (y=bx+bx^2).
The model fit is much better when the constant is not included (see
below). Although there is some minor theoretical reason for leaving
out the constant, I am concerned that this would not be acceptable
econometric practice.
WITH CONSTANT
Number of obs = 23
F( 2, 20) = 13.77
Prob > F = 0.0002
R-squared = 0.5794
Adj R-squared = 0.5373
Root MSE = .08926
WITHOUT CONSTANT
Number of obs = 23
F( 2, 21) = 44.90
Prob > F = 0.0000
R-squared = 0.8105
Adj R-squared = 0.7924
Root MSE = .08844
Can Anyone explain:
1. Why the model seems to fit better without the constant
2. Is this an acceptable practice ? And how can you justify it.
3. Are there any theoretical, mathematical drawbacks?
Thanks
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