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From |
Nick Cox <njcoxstata@gmail.com> |

To |
statalist@hsphsun2.harvard.edu |

Subject |
Re: st: How to reduce correlation between variables |

Date |
Tue, 7 Aug 2012 10:50:33 +0100 |

I agree with Maarten and Joseph. I note also that Ebru is referring to correlation between variables as posing a problem but doesn't say what that problem is. Personally I am more wary of a model being unnecessarily complicated than of the bugaboo called multicollinearity. If two or more predictors are highly correlated you can use scientific judgement to choose which makes more sense or choose according to which performs better as a predictor. Neither strategy requires an extra command, but rather a willingness to think about what you are doing rather than treating analysis as purely mechanical. Nick On Mon, Aug 6, 2012 at 7:38 PM, Maarten Buis <maartenlbuis@gmail.com> wrote: > On Mon, Aug 6, 2012 at 7:24 PM, Ebru Ozturk wrote: >> They are still correlated. Sample size is 285 firms and I cannot increase it. Is there other way to sole this problem? > > The new variables created by -orthog- shouldn't be correlated. Can you > show us the exact command you used (*) and the output for -corr- among > the new variables created by -orthog-? > > -- Maarten > > (*) the command you gave us some time ago would have produced an > error, so that cannot be the one. * * For searches and help try: * http://www.stata.com/help.cgi?search * http://www.stata.com/support/statalist/faq * http://www.ats.ucla.edu/stat/stata/

**Follow-Ups**:**Re: st: How to reduce correlation between variables***From:*"Justina Fischer" <JAVFischer@gmx.de>

**References**:**st: How to reduce correlation between variables***From:*Ebru Ozturk <ebru_0512@hotmail.com>

**Re: st: How to reduce correlation between variables***From:*Maarten Buis <maartenlbuis@gmail.com>

**RE: st: How to reduce correlation between variables***From:*Ebru Ozturk <ebru_0512@hotmail.com>

**Re: st: How to reduce correlation between variables***From:*Maarten Buis <maartenlbuis@gmail.com>

**RE: st: How to reduce correlation between variables***From:*Ebru Ozturk <ebru_0512@hotmail.com>

**Re: st: How to reduce correlation between variables***From:*Maarten Buis <maartenlbuis@gmail.com>

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