Abstract
So far we have considered only one regressor X besides the constant in the regression equation. Economic relationships usually include more than one regressor. For example, a demand equation for a product will usually include real price of that product in addition to real income as well as real price of a competitive product and the advertising expenditures on this product.
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References
This chapter draws upon the material in Kelejian and Oates (1989) and Wallace and Silver (1988). Several econometrics books have an excellent discussion on dummy variables, see Gujarati (1978), Judge et al. (1985), Kennedy (1992), Johnston (1984) and Maddala (2001), to mention a few. Other readings referenced in this chapter include:
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Baltagi, B.H. (2002). Multiple Regression Analysis. In: Econometrics. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-04693-7_4
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