* Multicollinearity in OLS Model for Consumption Function
*
* Keywords:
* regression, ols, linear, multicollinearity, us, consumption, function
*
* Description:
* We illustrate how to estimate a linear OLS Model for Consumption
* Function for the US and assess Multicollinearity in it
*
* Author(s):
* Skif Pankov
*
* Source:
* Damodar N. Gujarati and Dawn C. Porter, Basic Econometrics - 5th Edition
* McGraw-Hill International Edition, Chapter 10, Example 10.2 (page 335)
*
sample 1 54
* Reading the datafile and naming variables
read(data_10.2.shd) c yd w i
* Generating a natural logarithms of variables
genr lnc = log(c)
genr lnyd = log(yd)
genr lnw = log(w)
* Running an OLS regression of lnc on lnyd, lnw and i, stating to include residual
* statistics
ols lnc lnyd lnw i / rstat
stop