What is Frisch Waugh theorem? What is meaning of holding other variables constant Partialing out, Neting out… A practical example to understand the concept

This is a tutorial for a course I am teaching in Economic Forecasting and I have used tax collection data for Pakistan to model trend and seasonal components besides comparing performance of various models.

If there is an intercept in the regression model, the number of dummy variables must be one less than the number of classifications of each qualitative variable. If you drop the (common) intercept from the model, you can have as many dummy variables as the number of categories of the dummy variable. The coefficient of a dummy variable must always be interpreted in relation to the reference category. Video Link is https://youtu.be/LF_lmaT_pLU Dummy variables can interact with quantitative regressors as well as with qualitative regressors. If a model has several qualitative variables with several categories, introduction of dummies for all the combinations can consume a large number of degrees of freedom.

MC is data issue, some moderate level of MC must be in the model Force economic theory on data Use Principal Components careful

This is an example 4.5 given in Econometric Analysis by William Greene which is replicated using R

Hetroscedastic Corrected Standard Errors

Case 2 for Applied Economics

This dashboard is based on coronavirus data at a daily frequency

India and Bangladesh has very low prevalance rate of Corona so far if number of cases per million population are taken into account.

https://www.youtube.com/c/datavisualizationandanalytics_ZahidAsghar

This is an example from moderndive.com for understanding Simpson's paradox.

Simple data wrangling and visualization

An overview of Balance of Trade

Difference between Mean maximum and Mean Minimum Temprature over the past 60 years indicate that there is decreasing trend between this range. There an indication that mean minimum temperature over time has increased and mean maximum temperature has remained more or less at same level. One uses diurnal range for daily max and minimum temperature for assessing weather conditions. Smaller the diurnal range is, warmer is the weather (if maximum temperature has not shifted downward). For example if Lahore has maximum temperature 44 and minimum 30 degree celcius while Islamabad has maximum 44 while minimum is 20 , Islamabad will have shorter duration of warm weather than Lahore as per my understanding

This is a Markdown document with themes used : The Economist and Fivethirty

Fertility Rate vs Gross National Income

Source: Zameen.com