# Re: st: Weighted Least Squares

 From "Tam Phan" <[email protected]> To [email protected] Subject Re: st: Weighted Least Squares Date Tue, 15 Apr 2008 12:23:50 -0400

```Maarten, X1 = % and X2= %, however, X1 +X2 does not necessary have to
add up to 100% (as a matter of fact they dont).

The % are calculated based on the zone, they are not calcualted across
zone (say zone 1 and zone 2).

Basically the explanatory variables are at a zone level, however, the
regression is taking place at a higher level.  In order to "adjust"
the zone explanatory varaibles, these are weighted to the higher
level.

Tam

On 4/15/08, Maarten buis <[email protected]> wrote:
> - you have two (or more) variables: x1 = % in zone1, and x2 = % in
>  zone 2, which must add up to 100%
> - x1 and x2 are explanatory variables
> - you want these variables to have only one effect instead two (or
>  more) because you see them as one variable.
>
> Is that correct?
>
> -- Maarten
>
>
> --- Tam Phan <[email protected]> wrote:
>
> > Hello Stata Users:
> >
> > I have a quick question on weighted Least squares:  Below is the
> > following econometric equation:
> >
> > Q1+Q2 = alpha + [  (Q1/(Q1+Q2))*X1 + (Q2/(Q1+Q2))*X2 ]b + e
> >
> > Where X1 and X2 are the same explanatory variables, however with
> > different numerical values.  For example, X1 would be the % in one
> > zone, and X2 is the percent in another zone.
> >
> > Is there anything wrong w/ this logic?
> >
> >
> > y1=alpha1+beta1(P)+e
> > y2= alpha2 +beta2(P)+v
> >
> > To obtain the aggregate effect one would sum:
> >
> > y1+y2=(alpha1+alpha2) +(beta1+beta2)P+(e+v)
> >
> > Is there anything wrong with the above logic?
> >
> > Tam
> >
> > Tam
> > *
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> >
>
>
> -----------------------------------------
> Maarten L. Buis
> Department of Social Research Methodology
> Vrije Universiteit Amsterdam
> Boelelaan 1081
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> The Netherlands
>
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>
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>
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```