Thursday, December 18, 2008

Flipping Signs

The purpose of regressions is to obtain conditional means (or medians), in part so that we don't draw incorrect inferences from spurious correlations. Thus regressions are especially useful when we see a significant bivariate correlation, and then the significance goes away after conditioning on other variables.

But what if the sign on an explanatory variable flips from significant and positive before conditioning to significant and negative after conditioning on other variables? Should we take that negative sign seriously? If the model is specified properly, the answer is yes, but my gut tells me such models are rarely specified properly.


Anonymous said...

I assume this happened to you.

This is totally possible and within the scope of OLS if the "flipping" control variable was substantially positively correlated with the error term from the restricted (non-controlled) model.

You could check for this as a way to check the validity of your model.

Unknown said...

David lindahl scam report that the,Tax lien or Deed investing is not a risky factor at all; it takes a little bit factors to ensure that you will get reward in the future due to the property. Never hesitate to call and ask your queries, these counties use this amount from the taxes of the real estate asset to pay their labors and if the real estate asset owner is not going to step forward and give then you and I have the choice make some amount and the county labor usually go “out of their way” to help you. Give it a try.