Econometrics -Simple doubt(Multiple Reg)

[kangkan]

Consider two models

A: Y= a1 +(a2)X2 +(a3)X3  +ui ( 2 and 3 are subscripts)

B: Y-X2=B1+(B2)X2+X3

Will ols estimate of A2 and B2 be the same?Also for A3 and B3

I am getting they will be same..can someone please confirm

[sarawagisruti]

Hi,

I dont think the two regressions will have the same coefficients, but I am not sure. How did you get the same coefficients

[kangkan]

i wote the normal equations..in the normal equations X appears as X+1...but we know reg coefficients are insensitive to change of base ..hence

[Akshay Jain]

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[vandita24x7]

Hey kangkan the two equations can never be the same. This is because the moment you subtract X1 from Y you change the dependent variable totally!! Now you dont know in what shape your new dependent variable is so comparing both equations is meaningless

vandita

On 27 May 2014 09:37, "Akshay Jain [via Discussion forum]" <[hidden email]> wrote:

x+1 is change of origin not change of base....change of base is when u multiply or divide

Akshay Jain
M.A. Economics
Delhi School of Economics
2013-15

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