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st: Polynomial OLS

From   Claude Francoeur <>
To   "" <>
Subject   st: Polynomial OLS
Date   Thu, 25 Dec 2008 10:42:52 -0500


We are doing a polynomial OLS. An explanatory term is squared and cubed to account for non linearity of the association with the dependent variable. We also took the natural log of these variables to mitigate multicolinearity. We are getting significant coefficients. Our regression looks like this : Y = ln(X) ln(Xsquared) ln(Xcubed) and control variables. Is our approach valid?

Thanks for your help.


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