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# Category: Econometrics

## Optimizing Marketing Investment to Reach Communication Goals

Resources The code and data for the marketing optimization found below can be found on my GitHub account by clicking here: Background The problem of optimally spending marketing dollars can be formulated in many ways. The goal...

## Measuring Marketing Effectiveness: Cobb-Douglas Production Functions

Introduction, Data, and Program Measuring the effectiveness of a marketing channel is difficult due to the large amount of variables and other confounding factors. The field of Marketing Mix Modelling was first developed by...

## Outliers: Statistically detecting influential observations in R

One of the difficulties in accessing the quality of an econometric or regression models is determining if any of the key regression assumptions have been violated.  Regression analysis contains several key assumptions in order...

## Who Cheats on their Spouse and What Makes Marriages Happy? – Multinomial Logit and Probit Regression Analysis

BACKGROUND In 1978, Ray C. Fair from Yale University, extended the microeconomic framework to study why people have affairs. The paper creates an econometric model grounded in Utility theory. In economics, Utility Theory...

## Quantifying Multicollinearity

Multicollinearity is one of the more serious problems that can arise in a regression analysis or even in simple frequency and mean analysis with a causal interpretation. Regression analysis assumes a degree of independence...

## Programming in R: Modelling Investment Portfolios with Matrix Algebra

Investment portfolios are a collection of investments.  These investments can be anything including real estate, merchandise inventory, or a collection of businesses in a multinational corporation. However, the term is most...

## The Least Squares Assumptions

This post presents the ordinary least squares assumptions.  The assumptions are important in understanding when OLS will and will not give useful results.  The objective of the following post is to define the assumptions of...

## Election Outcomes and Economic Performance

The following links contain the dataset and the STATA program used to generate the econometric estimates found in this post. Data: Election Outcomes and Economic Peformance (1996) STATA Program: Election Outcomes and Economic...

## Evaluation of 1Q-2011 GDP Forecast: Missed by only 1/3 of 1%

A few months ago I created an ARIMA forecast for 2010’s 4th quarter and 2011’s first quarter GDP numbers.   My forecast proved to be very accurate in predicting the growth of the economy for the last 6 months. ...