The Ramsey test (estat ovtest in Stata) has results of F value around 0.9 (ranging from 0.098 to 0.088). Are such levels acceptable? I know that some scholars use the threshold of 0.05. Previously, I have always used 0.1 as threshold, but I am not certain if this is too strict.
Also, is Reset a must for a panel regression? Those papers that are similar to mine tend to only contain square of GDP, but not any other higher-power variables.
Thank you very much.
Yes, it is acceptable and concerning authors who do not do any higher-power of the variables -- it saves time and their focus is not only on RESET. The good may be the enemy of the perfect. You don't want a perfect model (because none exists), you just want a good.
Dear Chuck, thank you very much! Just another question, if I want to do a fixed-effects regression, is it sufficient to simply run a pooled-OLS and then ovtest (reg y x + ovtest) for the RESET? It seems that ovtest cannot run after xtreg, but only after reg.
Thank you again!
- Badges
- Science topic
- Similar topics
- Mathematics
- Statistics
- Regression