Quality & Quantity

, Volume 45, Issue 2, pp 403–423 | Cite as

The raise method. An alternative procedure to estimate the parameters in presence of collinearity

  • Catalina Garcia Garcia
  • José García Pérez
  • José Soto Liria
Article
First Online:

Abstract

Recently, Feng-Jeng (Qual Quant 42:417–426, 2008) has proposed the nested estimation procedure as another alternative from the practical point of view of the problem of multicollinearity. Although the nested estimation procedure can promise to avoid multicollinearity, it can also avoid important information by eliminating variables. We are presenting another alternative called the raise method, which keeps all the information which could be highly recommended in some cases. We apply our proposal to a known example and compare the results with the nested estimation procedure, the ridge regression and the principal components.

Keywords

Multicollinearity Nested estimate procedure Raise method 
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Copyright information

© Springer Science+Business Media B.V. 2010

Authors and Affiliations

  • Catalina Garcia Garcia
    • 1
  • José García Pérez
    • 2
  • José Soto Liria
    • 2
  1. 1.Quantitative Methods, Granada UniversityGranadaSpain
  2. 2.Applied Economy, Almeria UniversityAlmeriaSpain

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