The Use of Principal Components in Simultaneous Equations: An Empirical Application
Jones, Eugene
1985

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Abstract

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.

Details

Title The Use of Principal Components in Simultaneous Equations: An Empirical Application
Author(s) Jones, Eugene
Subject(s)
Issue Date 1985-08
Publication Type Conference Paper/ Presentation
DOI and Other Identifiers 10.22004/ag.econ.278516
Record Identifier https://ageconsearch.umn.edu/record/278516
Language English
Total Pages 14
Record Appears in Agricultural and Applied Economics Association (AAEA) > Agricultural and Applied Economics Association (AAEA) Conferences > 1985 Annual Meeting, August 4-7, Ames, Iowa

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