# Re: st: re: constraints

 From "Vidya Mahambare" To Subject Re: st: re: constraints Date Wed, 29 Jun 2005 08:27:03 +0100

```Yes, I agree - have tried out the method suggested in the FAQ to work out R^2
and it seems to work well.  Don't have access to Stata9 to try out -nl- and so
its easier to stick with the FAQ method than to work out -nl- correctly in
Stata8.

Vidya

>>> Richard.A.Williams.5@ND.edu 06/29/05 8:02 AM >>>
At 07:39 AM 6/29/2005 +0100, Vidya Mahambare wrote:
>Following Kit's suggestion I redefined the
>constraint   L.wpi+L2.wpi+L3.wpi=1 as
>b(L3) = 1-b(L)-b(L2), and regressed
>(wpi - L.wpi)  on (L.wpi-L3.wpi), (L2.wpi-L3.wpi) and other variables.
>
>This does not produce a correct R^2, as Richard suspected. It is much lower
>because of variables transformations, I think. Is there a way to to
>calculate a
>correct R^2 after using -reg- for this problem?
>
>Thanks,
>Vidya

There is still the original suggestion from the FAQ - basically run cnsreg,
compute the predicted values, and correlate them with the observed
values.  That seems like the simplest approach, unless there is a problem I
am overlooking.

In addition, as I just noted in another thread, in Stata 9 the -nl- command
provides a pretty good alternative to -cnsreg-.  Not only is there less
typing, you get R^2 as part of the output.  The -nl- command was rewritten
in Stata 9 and I believe you said you were using 8, so I don't know whether
or if you can do this.  Anyway, a simple Stata 9 example is

. sysuse auto
. nl (mpg = {b0} + {b1}*price + {b1}*weight + {b1}*displacement)

Whether you can adapt this to Stata 8, or whether you'll still run into the
same  issue of needing to transform the LHS, I don't know.  I'd probably
just go with the FAQ unless there is a problem with it in this case.  Or,
if you are going to be doing zillions of things like this, maybe it is
worth your while to figure out how to get -nl- to do this efficiently.

-------------------------------------------
Richard Williams, Notre Dame Dept of Sociology
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