# Re: st: Why OLS mean predicted values and the mean observed value ofthe dependent variable are the same

 From Joseph Coveney To Statalist Subject Re: st: Why OLS mean predicted values and the mean observed value ofthe dependent variable are the same Date Mon, 18 Sep 2006 19:29:05 +0900

```Menale Kassie wrote:

Why the mean predicted values (exphat) from OLS
regression indicated below is the same as the mean of
the observed value of the dependent variable
(lncvrpha)? I appreciate any help on this.

reg lnvcrpha lnareaha slopposn2-slopposn4 sldept if
dsttr ==1, cluster(hhcode)
predict exphat if dsttr ==0 & e(sample)

--------------------------------------------------------------------------------

There are reasons why this happens.  In your particular case, you might want
to post more of what you did, using the actual code that you used:  the code
that you show will give missing values for all exphat.

Also, it would be better if you snipped the post that you're replying to if

Joseph Coveney

. sysuse auto
(1978 Automobile Data)

. regress price weight if foreign == "Domestic":origin, noheader
------------------------------------------------------------------------------
price |      Coef.   Std. Err.      t    P>|t|     [95% Conf.
Interval]
-------------+----------------------------------------------------------------
weight |   2.994814   .4662321     6.42   0.000     2.058359
3.931268
_cons |  -3861.719   1579.522    -2.44
0.018    -7034.282   -689.1562
------------------------------------------------------------------------------

. predict price_hat if foreign == "Foreign":origin & e(sample), xb
(74 missing values generated)

. assert mi(price_hat)

. drop price_hat

. quietly regress price foreign

. predict price_hat, xb

. tabulate price_hat

Linear |
prediction |      Freq.     Percent        Cum.
------------+-----------------------------------
6072.423 |         52       70.27       70.27
6384.682 |         22       29.73      100.00
------------+-----------------------------------
Total |         74      100.00

. table foreign, contents(mean price) format(%8.3f)

-----------------------
Car type | mean(price)
----------+------------
Domestic |    6072.423
Foreign |    6384.682
-----------------------

.

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