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Re: Antwort: Re: Antwort: Re: st: Multicollinearity in panel data


From   Richard Williams <[email protected]>
To   [email protected], [email protected]
Subject   Re: Antwort: Re: Antwort: Re: st: Multicollinearity in panel data
Date   Wed, 09 Feb 2011 16:28:40 -0500

At 01:02 PM 2/9/2011, Maarten buis wrote:
--- On Wed, 9/2/11, Justina Fischer wrote:
> From my own experience, it works for age, age squared and age
> cubed (all not demeaned), if some people are sufficiently
> 'aged' in the data

I like centering my variables, not necessarily at the mean, but
at least such that 0 falls within or near the observed range of
my variables. That way the constant would be the expected value
of the outcome variable for some typical individual as defined
by the way I centered my variables, and I usually have a pretty
good idea of what that should be. This saved me couple of times
from some pretty nasty coding mistakes... Also this gives a
natural way to introduce in the text a baseline against which
one can compare the size of the effects. This can help when
discussing what effects are "big" or "small". Admittedly, this
is more a literary trick than a statistical one, but every
little bit helps.

One problem with using the mean is that it will differ from sample to sample. It might even vary within your own analyses, if differing amounts of missing data cause your Ns to differ. I think the most critical thing is picking a value so that zero is substantively meaningful. So, for example, if you subtract 12 from education, you know that a score of zero now corresponds to high school graduate. Or,if gpa ranges from 0 to 4, subtracting 3 means that a B student has a score of 0. This might be especially appealing if the means were close to these values anyway, e.g. 11.7 years of education or 3.1 gpa.


-------------------------------------------
Richard Williams, Notre Dame Dept of Sociology
OFFICE: (574)631-6668, (574)631-6463
HOME:   (574)289-5227
EMAIL:  [email protected]
WWW:    http://www.nd.edu/~rwilliam

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