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From |
"Nick Cox" <n.j.cox@durham.ac.uk> |

To |
<statalist@hsphsun2.harvard.edu> |

Subject |
st: RE: Quadratic term validity |

Date |
Wed, 10 Nov 2004 21:23:06 -0000 |

Are you really dealing with age or ln age? "Valid" or not depends on your criteria of validity, which are not explicit. From what I gather people like using quadratics in income versus age because they often fit fairly well, and there isn't a economic theory reason for the functional form. So you could make a case for dropping the linear term if it doesn't to seem to help with the fit. On the other hand, there are several grounds for being more circumspect: 1. Just because the linear term looks insignificant does not mean that the model with quadratic term alone is necessarly better, all things considered. 2. The P-value is just one indicator. You don't say anything about the change in R^2 or RMS error or (probably most important of all) where there is clear structure if you plot residuals from model with quadratic term alone versus age. 3. Inferences are surely complicated by the correlation between age and age^2. 4. There are good discussions of related issues in McCullagh and Nelder's book on generalised linear models and in Nelder's paper in American Statistician November 1998. Loosely, there are grounds for treating polynomial terms as yoked together like a team, although Nelder puts it better than that. Nick n.j.cox@durham.ac.uk Rozilee Asid > My wage model consists of several variables and model. One of my model > consists of quadratic term of age, example > Ln-wage = alpha0 + alpha1.ln_age + alpha2.ln_exp (model 1) > Ln_wage = alpha0 + alpha1.ln_age + alpha2.ln_exp + > alpha3.ln_age^2 (model 2) > > My main attention is to identified whether age play its > significant role in > the model. When I regress the model I found that alpha1 coefficient is > negative and insignificant and alpha3 is positive and significant. My > question is before I include the quadratic term of age > variable (model 1), > the alpha1 coefficient is positive and significant. > > Is it valid for me to report the finding from model 2 > equations, especially > when alpha1 is negative in the model. * * For searches and help try: * http://www.stata.com/support/faqs/res/findit.html * http://www.stata.com/support/statalist/faq * http://www.ats.ucla.edu/stat/stata/

**Follow-Ups**:**Re: st: RE: Quadratic term validity***From:*SamL <saml@demog.berkeley.edu>

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