applied econometrics - How do I fill gaps in my data?

In my study, I have 5 independent variables which contains 21 observation each. However one of my independent variables have 3 gaps. What should I do? e,gI would need to know the effect of education to inequality and I would like to conduct standard OLS method. However, I have one unbalanced data which have gaps unlike the rest of the data... what should I do? per say in 1997 (no data) 1998 (0.2345) 1999 (no data) 2000 (0.3453) and then from 2001 - 2017 it has continuous data....should I just drop it and start from 2001?...Read more

applied econometrics - What is the tolerable level for multicollinearity? and possible remedial measures for it?

My data has issues of multicollinearity. Upon estimating, I found out that my data have high levels of VIF In however I was confused as to what level of VIF can I possibly ignore the issue of multicollinearity. As I search the web, some says that it should be less than 2.5, others 10 or 14.My VIF results is this: varA: 18.74varB: 11.14varC: 10.03varD: 5.99varE: 2.86What step should I probably do to address the issue? I have fixed sample size and I can't log transform my model since one of my variables ranges from a negative to positive number....Read more

applied econometrics - Building a time-series demand forecasting model

I am forecasting demand for certain types of goods and services, which I expect to be correlated to a sub-set of a basket of macroeconomic indicators (considering 15-20 indicators)I do not know which indicators influence the demand more, whether they have a simple correlation influence or whether a derivative of change influences the demand (i.e. GDP or GDP change for example) or whether there’s a delayed effect on demand (e.g. increased government spend in last year may better predict this year’s demand?). Some macro indicators may be correlat...Read more