I have an econometric model using multiple linear regression.
lets say Q=alpha+beta*P1+gamma*P2+residuals
I would like to ask if the absolute values of P1 matter in estimating the correct coefficients. If I would run the regression with P3 (P3=P1-x; x being a real number) instead of P1, would I get the same result and just a different alpha, or would the estimate itself be different?
thank you for advice
this makes sense, so the estimation of the coefficient is the same and just the alpha changes, that is what I have expected ...
one more thing...how would it work if the model was in log version? how do you cope with the logarith of the sum/difference? alpha+beta*log(P1+x) or eventually alpha+beta*log(P1-x)
... I guess that cannot be rewritten, so I would end up with a different estimate of the coefficient since the independent variable itself has changed...
Last edited by xbender; 07-13-2010 at 01:18 AM.
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