Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/61688
Authors: 
Ritter, Nolan
Vance, Colin
Year of Publication: 
2011
Series/Report no.: 
Ruhr Economic Papers 282
Abstract: 
This note demonstrates that in applied regression analysis, the variance of a coefficient of interest may decrease from the inclusion of a control variable, contrasting with Clarke's assertion (2005, 2009) that the variance can only increase or stay the same. Practitioners may thus be well-advised to include a relevant control variable on this basis alone, particularly when it is weakly correlated with the variable of interest.
Abstract (Translated): 
Das vorliegende Papier zeigt, dass das Hinzufügen einer zusätzlichen Kontrollvariablen in eine Regressionsanalyse die Varianz des interessierenden Koeffizienten senken kann, was der Darstellung von Clark (2005, 2009) widerspricht. Daher wird geraten, theoretisch begründete Kontrollvariablen aufzunehmen, insbesondere wenn diese mit der Variablen von Interesse schwach korreliert sind.
Subjects: 
Control variables
variance
model specification
Control variables
variance
model specification
JEL: 
C12
C15
C18
ISBN: 
978-3-86788-327-6
Document Type: 
Working Paper

Files in This Item:
File
Size
149.06 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.