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From |
Anon Mouse <anon556656@live.ca> |

To |
<statalist@hsphsun2.harvard.edu> |

Subject |
st: Detecting collinearity during regression analysis |

Date |
Tue, 10 Feb 2009 11:28:43 -0800 |

Hello and thank you in advance, I have a question about detecting collinearity. First, see my example: ***BEGIN*** sysuse auto, clear xi: qreg mpg foreign i.make, nolog ***END*** Note in this example that I used quantile regression to determine effects of foreign and make on MPG. I used xi command to create dummy categorical variables for make (note that this creates quite a large number of variables for make, as make is a continuous variable, but I did this for example). Note that the coefficients are very small (e.g. e^-15), approaching zero. In this example, does this indicate collinearity? And why? The reason I used such a granular dummy categorization for make is to highlight my example. In my real data, I have age and wage. When I use categories such as age/10 or wage/10000, this gives me "collinearity" (i.e. very small coefficients). When I collapse these age or wage categories to smaller categories (i.e. age or wage as binomial variables, greater than or less than a certain value), I correct this problem of "collinearity". Am I correct in my assumptions? Thank you. _________________________________________________________________ Windows Live Messenger. Multitasking at its finest. http://www.microsoft.com/windows/windowslive/products/messenger.aspx * * 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: Detecting collinearity during regression analysis***From:*Steven Samuels <sjhsamuels@earthlink.net>

**Re: st: Detecting collinearity during regression analysis***From:*Steven Samuels <sjhsamuels@earthlink.net>

**st: Re: Detecting collinearity during regression analysis***From:*"Martin Weiss" <martin.weiss1@gmx.de>

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