Ridge Regression for Panel Data
Hi, I am doing a unit-fixed effects panel data analysis to examine the relationship between income and education for 26 regions over 9 years. My dependent variable is Gini, independent variables are proportion of graduates from various levels of education to total population and my controls are regional GDP, regional CPI, regional unemployment, regional LFPR and net migration rate. However, my model suffers from multicollinearity. I've been looking at regularisation techniques and want to use Ridge but I am not sure if it is suitable for panel data. Can anyone give me advice/recommendations on this please? Thanks very much in advance!!
Skalonga
7
Join Matchmaticians Affiliate Marketing
Program to earn up to a 50% commission on every question that your affiliated users ask or answer.
- unanswered
- 556 views
- Pro Bono
Related Questions
- Bayesian statistics
- Statistics problem
- Combinations of factors not observed, non-full rank design matrix. How to explain to investigator?
- Please check if my answers are correct - statistic, probability
- stats- data analysis
- Two statistics proofs with regressions, any help much appreciated!
- Conditional mean and variance for joint PDF
- Quantitative reasoning
Questions at this level should come with a bounty.
How much do you reckon?
Think about how much time one may need to spent to write an answer and what a reasonable hourly rate for such individual would be. It'll give you a pretty good idea.