Week 9 - Nonlinear Regression

Content for week of Monday, October 26, 2020–Friday, October 30, 2020

Overview
Reading Guide
Slides
Videos

Overview

Let’s make regressions faaaancy, with three new friends: polynomials, logarithms, and interactions!

Reading Guide

Chapter 8: Nonlinear Regression Functions

SW 8.1 A General Strategy for Modeling Nonlinear Regression Functons

Key takeaway here - thnk about the economic theory and its application to determine the best approach to modeling!

SW 8.2 Nonlinear Functions of a Single Independent Variable

Polynomials and logs. Note that this section includes only 3 ways of setting up equations: level-level, log-log, log-level. We’ll also cover level-log, because, why not?

SW 8.3 Interactions Between Independent Variables

Three types of interactions you should know:

Binary-binary
Continuous-binary
Contnuous-continuous

Slides

Download this week's slides.

Videos

Warning! The interactions example I work through is … uninspired. I clearly should not have taken on baseball. I regret it. 😳 😬 Also, the reason why there are only 3 race/ethncity categories in the MLB is because in 1993, all players fell into only those three groups!