scholarly journals Effects of Multicollinearity and Correlation between the Error Terms on Some Estimators in a System of Regression Equations

2020 ◽  
pp. 77-94
Author(s):  
Olanrewaju, Samuel Olayemi
Keyword(s):  
Single Equation ◽  
Equation Model ◽  
Least Square ◽  
Monte Carlo Experiment ◽  
Regression Equations ◽  
Least Square Estimator ◽  
Ordinary Least Square ◽  
Independent Variables ◽  
Joint Influence ◽  
Error Terms

One of the assumptions of a single equation model is that there is one -way causation between the dependent variable Y and the independent variables X. When the assumption is not valid, as, in many econometric models, of lack of correlation between the independent variables and the error terms (U) is further violated, Ordinary Least Square estimator would no longer efficient, that was why this study examined the effects of multicollinearity and a correlation between the error terms on the performance of seven estimators and identified the estimator that yields the most preferred estimates under the separate or joint influence of the two correlation effects under consideration. A two-equation model in which the two correlation problems were introduced was used in this study. The error terms of the two equations were also correlated. The levels of correlation between the error terms and multicollinearity were specified between -1 and +1 at an interval of 0.2 except when the correlation value approached unity. A Monte Carlo experiment of 1000 trials was carried out at five levels of sample sizes 20, 30, 50, 100, and 250 at two runs.

scholarly journals Effects of Correlation between the Error Term and Autocorrelation on Some Estimators in a System of Regression Equations

2020 ◽  
pp. 57-75
Author(s):  
Olanrewaju, Samuel Olayemi
Keyword(s):  
Regression Model ◽  
Time Series Data ◽  
Equation Model ◽  
Seemingly Unrelated Regression ◽  
Series Data ◽  
Regression Equations ◽  
Joint Influence ◽  
Unrelated Regression ◽  
Correlation Problem ◽  
Error Terms

Seemingly unrelated regression model developed to handle the problem of correlation among the error terms of a system of the regression equations is still not without a challenge, where each regression equation must satisfy the assumptions of the standard regression model. When dealing with time-series data, some of these assumptions, especially that of independence of the regressors and error terms leading to multicollinearity and autocorrelation respectively, are often violated. This study examined the effects of correlation between the error terms and autocorrelation on the performance of seven estimators and identify the estimator that yields the most preferred estimates under the separate or joint influence of the two correlation effects considered by the researcher. A two-equation model was considered, in which the first equation had multicollinearity and autocorrelation problems while the second one had no correlation problem. The error terms of the two equations were also correlated. The levels of correlation between the error terms and autocorrelation were specified between -1 and +1 at interval of 0.2 except when it approached unity.

scholarly journals Dampak Ekonomi dan Kesehatan pada Konsumen Rokok Elektronik di Kota Bandung

2019 ◽  
Author(s):  
Estro Dariatno Sihaloho ◽  
Irlan Adiyatma Rum
Keyword(s):  
Electronic Cigarettes ◽  
Economic Effects ◽  
Electronic Cigarette ◽  
Least Square ◽  
Cigarette Consumption ◽  
Ordinary Least Square ◽  
Independent Variables ◽  
Different Characteristics

Consumers of conventional cigarettes have begun to switch to using electronic cigarettes. Having different characteristics of these two kinds of cigarettes make the different health and economic effects to consumers. This study uses Ordinary Least Square (OLS) method to analyze the influence of electronic cigarette usage on conventional cigarette usage in Bandung in 2017. This study used 200 respondents of electronic cigarette users. This study uses the amount of conventional cigarette consumption after using electronic cigarette per day (Y) as the dependent variable. For independent variables, this study uses conventional cigarette consumption before using electronic cigarette per day (X1), total liquid of electronic cigarette consumption per month (X2), monthly electronic cigarette expenditure (X3), and respondent's perception whether using electronic cigarette more healthy (X4). Regression results showed that X1 and X4 have significant effect on Y. The increase of 1 stem of conventional ciga-rettes consumption before using electronic cigarette per day (X1) will increase the consumption of conventional cigarettes after using electronic cigarette per day (Y) of 0.1618005 stem. While with the respondent's perception that using electronic cigarette is healthier (X4) will reduce the consumption of conventional cigarettes (Y) as much as 5.169504 stems

scholarly journals Pengaruh umur, pendidikan, upah, keterampilan, dan jenis kelamin terhadap lama mencari kerja bagi pekerja terdidik di Kota Jambi (studi kasus Kecamatan Kota Baru dan Telanaipura)

2020 ◽  
Vol 9 (1) ◽  
pp. 1-12
Author(s):  
Cici Swarsih ◽  
Junaidi Junaidi ◽  
Rosmeli Rosmeli
Keyword(s):  
Sampling Method ◽  
Least Square Method ◽  
Total Sample ◽  
Least Square ◽  
Primary Data ◽  
Wage Level ◽  
Ordinary Least Square ◽  
Independent Variables ◽  
And Gender ◽  
Multistage Sampling

This study aims to analyze the characteristics of educated workforce and to determine the effect of variables of age, education, wage level, skills and gender on duration of looking for work by educated worker in Jambi City. The data used in this study are primary data obtained from questionnaires and direct interviews with a total sample of 110 respondents. Sampling in this study uses a multistage sampling method that is sampling in stages. Data analysis methods used are descriptive and quantitative analysis. The analytical tool used is the OLS (Ordinary Least Square) method. The results of this study indicate that the independent variables simultaneously have a significant effect on duration of looking for work. Partially the variables of age, education, wage level have a significant effect on duration of looking for work, while the skills and gender variables have no significant effect on the duration of looking for work.

scholarly journals Fraud Pentagon Model for Detecting Fraudulent Financial Reporting in Banking Sector

2020 ◽  
Vol 8 (6) ◽  
pp. 2832-2838
Keyword(s):  
Financial Reporting ◽  
Banking Sector ◽  
Influencing Factor ◽  
Secondary Data ◽  
Least Square ◽  
Fraudulent Financial Reporting ◽  
Ordinary Least Square ◽  
Independent Variables ◽  
Section Data ◽  
Recent Trends

Many discussions and opinions of experts who produce endangement or tools to detect the possibility of fraud in reporting financial performance. One of the most recent trends is the Pentagon fraud approach. Pentagon is a form that has five sides, there are five categories of causes of fraud in pentagon fraud, namely: pressure, opportunity, rationalization, competence and arrogance. Our research takes samples from banks, because the sector is the most common case of fraud. We made this quantitative secondary data-based research to have written evidence for reference in banking sectors. We use cross section data from 2016 year ends up to 2018. We own 35 samples from three years period, the total of 105 samples. We use ordinary least square using nine independent variables and one dependent variable. After conducting this research, we found that opportunity is the most influencing factor for company in banking sector to do fraud. While the others factor has no significant effect.

scholarly journals Determinants of Household Debt in Malaysia from the year 2010 to 2017

2019 ◽  
Vol 5 (2) ◽  
pp. 91
Author(s):  
Zahariah Mohd Zain ◽  
Nurul Ainun Ahmad Atory Ahmad Atory ◽  
Sarah Amirah Hanafi
Keyword(s):  
Positive Relationship ◽  
Negative Relationship ◽  
Housing Price ◽  
Least Square ◽  
Household Debt ◽  
Macroeconomic Variables ◽  
Explanatory Variables ◽  
Ordinary Least Square ◽  
Independent Variables ◽  
Lending Rate

Household debt has become an issue in the Malaysian economy as it affects the country socially and economically.This study aims to examine the determinants of household debt from the year 2010 until 2017. This study employs the Ordinary Least Square (OLS) method and the macroeconomic variables used in this study are Gross Domestic Product (GDP), base lending rate, unemployment and housing price as independent variables. The results indicate that the trend of household debt in Malaysia has shown a continuous rise from the year 2010 to 2017. GDP, base lending rate and housing price indicate a positive relationship towards household debt while unemployment shows a negative relationship to household debt in Malaysia. All explanatory variables have shown a significant relationship except for GDP. Housing price has been found to be the most significant factor and positively related to household debt. The findings indicate that the higher the price of houses, the higher the household debt will be.

scholarly journals PENGARUH PRODUK DOMESTIK BRUTO DAN SBI TERHADAP PENERIMAAN PAJAK DI INDONESIA

2020 ◽  
Vol 1 (1) ◽  
Author(s):  
Rahmanta Ginting
Keyword(s):  
Time Series ◽  
Research Result ◽  
Least Square ◽  
Domestic Product ◽  
Tax Revenue ◽  
Ordinary Least Square ◽  
Independent Variables ◽  
Dependent Variables ◽  
Negative Effect ◽  
Positive Effect

The research to analyse effect net domestic product and SBI on tax revenue in Indonesia with independent variables  net domestic product and SBI also dependent variables tax revenue. Data is a time series between 1981 - 2010 with ordinary least square (OLS) and the model of formula used is multiply linier regression.  The research result shows that net domestic product gives a positive effect and significant on tax revenue in Indonesia on 99% level. While SBI has a negative effect and significant on tax revenue in Indonesia on 90% level.

Determinants of financial literacy in rural India: A study of Aligarh district

2021 ◽  
pp. 2150009
Author(s):  
N. P. Abdul Azeez ◽  
S. M. Jawed Akhtar
Keyword(s):  
Financial Literacy ◽  
Financial Services ◽  
Service Providers ◽  
Social Groups ◽  
Multiple Regression Model ◽  
Least Square ◽  
Rural India ◽  
Rural People ◽  
Ordinary Least Square ◽  
Independent Variables

What drives rural people to use financial services and products is a critical step in the journey towards financial inclusions. The financial service providers and policymakers have engaged with this challenge by seeking insights into the socio, economic, demographic and cultural factors that prompt people to be aware and learn about financial services and products, try them out, and use them over time. The determinants of financial literacy focus more sharply on the socio-economic demographic factors, and have used ordinary least square, multiple regression model. This model determines how various independent variables namely age, gender, income, religion, social groups, family size, marital status, educational level, occupation, etc. significantly influence financial literacy of the respondents.

scholarly journals Exploring relationships among recall effectiveness indicators in the US meat and poultry industry

2019 ◽  
Vol 22 (1) ◽  
pp. 97-106 ◽  
Author(s):  
Jianbin Yu ◽  
Neal H. Hooker
Keyword(s):  
Simultaneous Equation ◽  
Equation Model ◽  
Vital Role ◽  
Economic Consequences ◽  
Least Square ◽  
Least Square Estimator ◽  
Recovery Rates ◽  
The Us ◽  
Food Recalls ◽  
Completion Times

Food recalls need to balance speed and completeness, consumer and firm interests and thus meet managerial and social goals. Effective recalls play a vital role in protecting public health and reducing economic consequences. This paper develops a simultaneous equation model to explore the relationships among three effectiveness indicators; discovery time, completion time and recovery rate. A three-stage least square estimator is applied to control for endogeneity among these indicators. The results suggest that higher recovery rates are associated with shorter discovery times. Longer discovery times led to longer completion times. Longer completion times elicited higher recovery rates. Recalls with high risk to human health had shorter discovery times but longer completion times and lower recovery rates. Recalls issued by large plants had shorter discovery times. Large recalls and national distribution channels negatively impacted discovery times. Compared to other stakeholders, government agencies took longer to discover the problem leading to a recall.

scholarly journals Deposit Money Banks and Economic Growth in Nigeria

2014 ◽  
Vol 5 (1) ◽  
pp. 41-50 ◽  
Author(s):  
Samson Ogege ◽  
Tarila Boloupremo
Keyword(s):  
Economic Growth ◽  
Time Series Data ◽  
Banking System ◽  
Least Square ◽  
Series Data ◽  
Credit Allocation ◽  
Least Square Estimator ◽  
Ordinary Least Square ◽  
Residual Series

This paper examines the effect of deposit money banks intermediation role on economic growth and development in Nigeria. The main objective of the research was to ascertain the extent to which sectorial credit allocation by deposit money banks have influenced growth in the economy. Time series data covering the period 1973-2011 for deposits money banks credits in Nigeria and per capita gross domestic product were analyzed within the framework of Engle-Granger Representation Theorem; the approach estimated a co-integrating regression using the ordinary least square estimator, and then investigated the presence of a co-integration relation by examining the stationarity of the estimated residual series. The findings indicate that credit allocation to the production sector is significantly promoting economic activity. The implication that can be drawn from this study is that to ensure that the banking system performs its role of credit allocation effectively it must channel funds into productive investment and more productive uses; deposit money banks should act as efficient financial intermediaries devoted to allocating resources to the most productive uses.

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