Dear R users,
I think i have a simple question which i want to explain by an example;
i have several 2-digit industry codes that i want to use for conducting
by-industry analysis but i think there is a problem with the degrees of freedom!
for example, when i do my analysis without any 2-digit industry code, i got the
following summary (i have 146574 observations in total):
> abc<-lm(lnQ~lnC+lnM+lnL+lnE+eco+inno, data=ds)
> summary(abc)
Call:
lm(formula = lnQ ~ lnC + lnM + lnL + lnE + eco + inno, data = ds)
Residuals:
Min 1Q Median 3Q Max
-11.01340 -0.17637 -0.02217 0.14974 7.79005
Coefficients:
Estimate Std. Error t value Pr(>|t|)
(Intercept) 0.8870369 0.0050646 175.144 <2e-16 ***
lnC 0.0658922 0.0006549 100.614 <2e-16 ***
lnM 0.8027478 0.0006549 1225.764 <2e-16 ***
lnL 0.0173622 0.0004025 43.138 <2e-16 ***
lnE 0.0657710 0.0006745 97.516 <2e-16 ***
ecoTRUE 0.0101649 0.0045892 2.215 0.0268 *
innoTRUE 0.0945100 0.0030317 31.174 <2e-16 ***
---
Signif. codes: 0 *** 0.001 ** 0.01 * 0.05 . 0.1 1
Residual standard error: 0.294 on 146160 degrees of freedom
(407 observations deleted due to missingness)
Multiple R-squared: 0.9705, Adjusted R-squared: 0.9705
F-statistic: 8.027e+05 on 6 and 146160 DF, p-value: < 2.2e-16
as we can see from the last row there are 146160 DF (407 deleted) this is ok!
but when i want to use for example just one of the industry lets say just the
11th industry
1st: i create the dummy for this industry such as;
>ind1=(ind_2d==11)# so here the R supposed to consider just the 11th industry!!
> abc<-lm(lnQ~lnC+lnM+lnL+lnE+eco+inno+ind, data=ds)
> summary(abc)
Call:
lm(formula = lnQ ~ lnC + lnM + lnL + lnE + eco + inno + ind,
data = ds)
Residuals:
Min 1Q Median 3Q Max
-11.03392 -0.17647 -0.02301 0.14901 7.74957
Coefficients:
Estimate Std. Error t value Pr(>|t|)
(Intercept) 0.8980397 0.0050451 178.001 < 2e-16 ***
lnC 0.0672255 0.0006523 103.065 < 2e-16 ***
lnM 0.7990819 0.0006579 1214.596 < 2e-16 ***
lnL 0.0171633 0.0004004 42.870 < 2e-16 ***
lnE 0.0670030 0.0006716 99.770 < 2e-16 ***
ecoTRUE 0.0162249 0.0045672 3.552 0.000382 ***
innoTRUE 0.0966967 0.0030160 32.062 < 2e-16 ***
indTRUE -0.1251466 0.0031509 -39.717 < 2e-16 ***
---
Signif. codes: 0 *** 0.001 ** 0.01 * 0.05 . 0.1 1
Residual standard error: 0.2924 on 146159 degrees of freedom
(407 observations deleted due to missingness)
Multiple R-squared: 0.9709, Adjusted R-squared: 0.9709
F-statistic: 6.957e+05 on 7 and 146159 DF, p-value: < 2.2e-16
but as we can see it again counted in all the industries! so the DF is 146159!!!
So i just wonder, where do i made mistake, or there is no mistake at all, and i
just misunderstood the DF issue?
Any answer would be appreciated
thanks in advance
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