Nature of Multicollinearity, Is Multicollinearity really a problem? Practical consequences, detection and remedial measures of multicollinearity.
Nature of heteroscedasticity, consequences, detection and remedial measures of heteroscedasticity.
Nature of autocorrelation, theoretical and practical consequences of autocorrelation, detection and remedial measures of autocorrelation.
– Regression on Dummy Variables.
Nature of dummy variables, regression with a mixture of quantitative and qualitative regressions: the ANOVA models, some illustrative examples of regressions on dummy variables, the structural stability of regression models/ comparing two regressions with dummy variable approach , interaction effects using dummy variables, use of dummy variables in seasonal analysis, piecewise linear regression.
– Specification Errors:
Model specification criteria, Types of specification errors: omission of relevant variable, inclusion of irrelevant variable, adopting a wrong functional form, errors of measurement; Consequences of model specification errors, and tests of specification errors.
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