Tuesday, October 22, 2013

Solution to the Segmented Regression Problem

Here's my solution to the "segmented regression" problem that I posed yesterday. Thanks for the comments and suggestions!

You'll recall that what we wanted to do was to end up with a fitted least squares "line" looking like this:

In particular, the "kink" in the line is at a pre-determined point - in this example when x = 30.

Here's how we can achieve this:

Money 101: Top Resources for Finance Majors

Abigail Moore, the Content Creator at OnlineFinanceDegree.org, emailed me today:

"I'm writing with the exciting news that our latest article, "Money 101: Top Resources for Finance Majors," has been published, and Econometrics Beat: Dave Giles' Blog is cited on it.
Finance is an engaging and highly competitive professional field to get into. For those studying finance, the internet can offer a wealth of resources. That said, it can be hard to sift through and find the best. We hope this feature will help finance students find information about financial organizations, current economic news, financial modeling software and techniques, and the finance industry as a whole. Your site is a valuable addition to this resource.
We're hoping to share this article with as many finance students and professionals as possible and will be contacting our readers and followers. If you're able to post this on your website or share the article anywhere else you can think of too, I'd really appreciate it." 
No problem, Abigail - happy to oblige. You'll find this blog listed as site #8.

© 2013, David E. Giles