Monday, March 06, 2006

st: areg/xtreg

I am using Stata 8.2. I have a question regarding what is written in the Stata manual for -areg-. The manual reports that "-areg- identifies the model by choosing the intercept that makes the prediction calculated at the means of the independent variables equal to the mean of the dependent variable: y(hat)=x(hat)*beta"

I have used this fact to try to calculate the "percent of mean explained" by each independent variable in my regression. For concreteness, I have regressed like this:

areg depvar indvar1 indvar2 indvar3, absorb(timevar)

For the percent of mean explained calculation, I have taken each coefficient multiplied by the mean of that independent variable and divided by the mean of the dependent variable. After I have done this for all three independent variables, in theory the three percentages should add up to 1. However, this is not the case. Can anyone see why not?

Thank you, Terra Curtis * * For searches and help try: * * *


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