Econistics Research and Consulting | Chapter 1 – Ridge Regression for Collinear Estimates in STATA
Econometrics, Data Science, Research Methods, Statistics, STATA, R,
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Chapter 1 – Ridge Regression for Collinear Estimates in STATA

19 Jun Chapter 1 – Ridge Regression for Collinear Estimates in STATA

When the independent variables are collinear with each other, and there is no option to reduce them using step wise regression or factor analysis as all of them are important. Then in this case ridge regression can be used to estimate the model by force and adjust the biasness caused by the collinearity

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