The Use of Principal Components in Simultaneous Equations: An Empirical Application

The transformation of jointly dependent and predetermined variables into principal components is shown to be an effective method for handling multicollinearity in simultaneous equations at the second stage. Estimates are obtained which are theoretically meaningful and • statistically significant. Simulations from the reduced forms are realistic relative to historical values.


Issue Date:
1985-08
Publication Type:
Conference Paper/ Presentation
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/278516
Language:
English
Total Pages:
14




 Record created 2018-10-18, last modified 2020-10-28

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)