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I Significant correlation, not significant coefficient

  1. Apr 30, 2017 #1
    A couple of questions today. First. I am running a panel data regression test. First I check the correlations between the independent variables and the dependent variable. these are the results.
    upload_2017-4-30_17-32-50.png

    The D/(D+Em) is the dependent variable, and the independent are the 4 variables most adjacent. Disregard the two outer variables (the red area). The independent variable "Anleggsmidler/eiendeler" has a correlation coefficient (pearson's) to the dependent variable of ,177 and this is a very significant result as you can see. However, when I do the regression analysis (as shown below), the relation between "Anleggsmidler/eiendeler" and the dependent variable is not significant at all. How come the results are so different in terms of significance?

    upload_2017-4-30_17-38-18.png
    Second question is is there any command to include standardised coefficients to fixed effects regression results in stata? the beta command does not work when I use fixed effects regression (i am pretty green when it comes to Stata). Any advice on these two questions? Thanks in advance!
     
  2. jcsd
  3. Apr 30, 2017 #2

    Dale

    Staff: Mentor

    You have pretty substantial multicolinearity in this data. The estimates of individual coefficients will be unreliable in the regression.
     
  4. Apr 30, 2017 #3
    hey. I used a VIF-test and it produced the following numbers: I understand that it differs what is regarded as acceptable, but as far as I know, below 10 is usually no disaster (based on google searches, not on my acumen).

    Variable VIF 1/VIF
    lndriftsin~r 5.72 0.174921
    anleggsmid~r 5.02 0.199399
    totalrenta~t 1.34 0.743779
    markedbok 1.18 0.845347
    Mean VIF 3.31
     
  5. Apr 30, 2017 #4

    FactChecker

    User Avatar
    Science Advisor
    Gold Member

    By the time the (estimated) effects of the other variables are taken into account, there is not enough left for Anleggsmidler/eiendeler to be statistically significant. It should be removed from the model and the linear regression should be re-run without it.
     
  6. Apr 30, 2017 #5

    Dale

    Staff: Mentor

    Instead, just try running a reduced model deleting totalrentabilitat
     
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