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Thread: Dependent variable is function of itself

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    Dependent variable is function of itself




    I have a model: qty=a.price+....(other IVs)
    Price is calculated as sales_amount/qty.
    Hence for a customer, if we aggregate data of a certain time-period (say month), we get:
    q1+q2+q3+...=a.(s1+s2+s2+...)/(q1+q2+q3+...)+....(other IVs)
    where s(i) denotes sales_amount.
    Will there be any problem because of this?

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    Re: Dependent variable is function of itself

    Quote Originally Posted by abhik View Post
    if we aggregate data of a certain time-period (say month)
    You do not need to aggregate data.

    Does the price really change that much day-by-day? If so, I probably would not aggregate data.

    The part where you calculate (s1+s2+s3+...)/(q1+q2+q3+...) really seems like something you should not do. Looks like I would instead calculate s1/q1, s2/q2, s3/q3, ... ie, I would not be aggregating data.
    All things are known because we want to believe in them.

  3. #3
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    Re: Dependent variable is function of itself


    Ok so let me simplify the problem. Instead of aggregating, if we just keep:
    q1=a.s1/q1+....(other IVs)
    Will this create a problem (since the DV is a function of itself)?

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