st: Polynomial OLS

[Claude Francoeur <claude.francoeur@hec.ca>]

Hello,

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.

Claude

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