5
votes
2answers
161 views

How does the number of free dimensions of a model affect its required size of sample?

Adding more variables to a model usually increases its accuracy. However, without adequate analysis it could also lead to curve fitting. Another question (How much data is needed to validate a ...
0
votes
0answers
108 views

effectiveness of linear regression in prediction [closed]

How effective is linear regression in predicting asset Price ? If not, which is the most effective way to predicting an asset price? Also,price movements are non-linear, why is linear regression ...
4
votes
1answer
280 views

Why are regressors squared and not ^1.5 or ^2.2 or ^2.5?

When a researcher in economics or finance wants to apply a linear regression model but suspects a non-linear relationship between one of the regressors and the dependent variable, it is typical to ...