Dummy Variables
Use of Dummy Variables in Testing for Equality Between Sets of Coefficients in Linear
Regressions: A Generalization
Author(s): Damodar Gujarati
Source: The American Statistician, Vol. 24, No. 5 (Dec., 1970), pp. 18-22
Published by: American Statistical Association
Stable URL: http://www.jstor.org/stable/2682446 .
Accessed: 09/07/2013 18:34
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Use of Dummy Variables in Testing for Equality Between Sets of Coefficients in Linear Regressions: A Generalization*
DAMODAR
GUJARATI
City University of New York
1. Introduction
In the February 1970 issue of The American Statistician I had shown how the dummy variables 1 and 0 can be used as an alternative to the standard analysis of variance and covariance techniques and the Chow
[1] test. That discussion was, however, confined to two linear regressions and to two variables-one dependent and one independent. The purpose of the present note is to generalize the dummy variable technique to more than two linear regressions in more than two variables and to point out some of the problems involved in the actual application of the technique.
2. GeneralizedDummy Variable Approach
It might be helpful to begin with a numerical
Regressions: A Generalization
Author(s): Damodar Gujarati
Source: The American Statistician, Vol. 24, No. 5 (Dec., 1970), pp. 18-22
Published by: American Statistical Association
Stable URL: http://www.jstor.org/stable/2682446 .
Accessed: 09/07/2013 18:34
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp .
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.
.
American Statistical Association is collaborating with JSTOR to digitize, preserve and extend access to The
American Statistician.
http://www.jstor.org
This content downloaded from 14.139.245.68 on Tue, 9 Jul 2013 18:34:31 PM
All use subject to JSTOR Terms and Conditions
Use of Dummy Variables in Testing for Equality Between Sets of Coefficients in Linear Regressions: A Generalization*
DAMODAR
GUJARATI
City University of New York
1. Introduction
In the February 1970 issue of The American Statistician I had shown how the dummy variables 1 and 0 can be used as an alternative to the standard analysis of variance and covariance techniques and the Chow
[1] test. That discussion was, however, confined to two linear regressions and to two variables-one dependent and one independent. The purpose of the present note is to generalize the dummy variable technique to more than two linear regressions in more than two variables and to point out some of the problems involved in the actual application of the technique.
2. GeneralizedDummy Variable Approach
It might be helpful to begin with a numerical
References: 28, No. 3, July, 1960, pp. 591-605. 4. Zellner, Arnold, "An Efficient Method of Estimating Seemingly Unrelated Regressions and Tests for Aggregation Bias," J.A.S.A., 57, (1962), pp