08 January 2018 5 4K Report

We have collected population growth data of a carnivore from five provinces and would like build a multiple linear regression model (OLS) with two explanatory variables. We have 7 observations each from two provinces, 22 observations each from two provinces, and 30 observations from one province, with the total sample size of 88. Data exploration shows a temporal trend in the growth rate so we need to include a time index in the model as a predictor to control its effect. We would like to explore the differences in growth rates across five provinces by including four dummies in the multiple regression model. But we are not sure whether that would really work because we have 7 observations in two states and there would be at least three predictors. Although we have enough samples at the aggregate level, we suspect that the sample size might be a limitation to do the analysis at the province level. We would highly appreciate your thoughts regarding the inclusion of four dummies to represent five provinces in the multiple regression model and how this will influence the estimates. We would greatly appreciate if you could direct us to the relevant literature on this issue.

Thank you for your suggestions.

Happy New Year!

Sincerely,

Nabin

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