[Limdep Nlogit List] A questio about correlation of variables

Lin Zhou lindazhou84 at gmail.com
Wed Oct 22 10:50:50 EST 2008


Dear Limdep users,

I developed a RPL model and some export gave me a comment:

The RPL model estimated has a major multi-collinearity issue. This is
obvious given the *rho2* equal to 0.58 Experience shows that the practical
range of values for rho2 is between 0 and about 0.3 (or maybe 0.35). Values
higher than that are a sure indication of "independent" variables that are
correlated. A correlation analysis must be conducted among all variables

My questions are:
1. What does "*rho2*" refer to?
2. How to examine whether the variables are *correlated* please? Is their
any function in limdep to do this? Or I need to import my stacking data into
SAS or SPSS to examine the correlation.

Could you please give me some suggestions?
Thank you very much!

-- 
L



More information about the Limdep mailing list