Partial regression and residualized variables
Partial regression coefficients are the most important parameters of the multiple regression model. They measure the expected change in the dependent variable associated with a one unit change in an independent variable holding the other independent variables constant. This interpretation of partial regression coefficients is very important because independent variables are often correlated with one another. Unfortunately, the concept of partial regression can be somewhat difficult to understand because it relies upon the notion of statistical control. However, this difficulty can be alleviated somewhat if we view a partial regression coefficient as equivalent to a simple regression coefficient involving an independent variable that has had the effects of the other independent variables removed from it.
KeywordsEconomic Openness Residualized Variable Multiple Regression Model Public Expenditure Simple Regression
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