Evaluation of Two Stage Modified Ridge Estimator and Its Performance
Biasedestimation methods are more desirable than two stage least squares estimationfor simultaneous equations models suffering from the problem ofmulticollinearity. This problem is also handled by using some prior information.Taking account of this knowledge, we recommend two stage modified ridgeest...
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| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Sakarya University
2018-12-01
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| Series: | Sakarya Üniversitesi Fen Bilimleri Enstitüsü Dergisi |
| Subjects: | |
| Online Access: | https://dergipark.org.tr/tr/download/article-file/454608 |
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| Summary: | Biasedestimation methods are more desirable than two stage least squares estimationfor simultaneous equations models suffering from the problem ofmulticollinearity. This problem is also handled by using some prior information.Taking account of this knowledge, we recommend two stage modified ridgeestimator. The new estimator can also be evaluated as an alternative to thepreviously proposed two stage ridge estimator. The widespread performancecriterion, mean square error, is takeninto consideration to compare the two stage modified ridge, two stage ridge andtwo stage least squares estimators. A real life data analysis is investigatedto prove the theoretical results in practice. In addition, theintervals of the biasing parameter which provide the superiority of the twostage modified ridge estimator are determinedwith the help of figures. Theresearchers who deal with simultaneous systems with multicollinearity can opt forthe two stage modified ridge estimator. |
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| ISSN: | 2147-835X |