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What is cross section plan?

What r squared values in econometrics are considered low medium and high for cross section and time series?

  • for example i know that the rsquared values for cross section data that are lower are considered just as good a higher times series values. e,g is 0.56r^2 for cross section data just as good as 0.96r^2 for time series? cheers

  • Answer:

    Theoretically it doesn't matter if it's time series or cross section. But you are right in time series we usually see much higher R2. 0.56 for a cross section is good but not perfect, 0.96 for time series is very good.

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In certain time seiries data as time increases the value of the dependent variable almost always increase. So time series data generally would tend to have highere r squared correlation. Si in time series data we look for much closer rsuared values than crosssection data in order to be confident about the strength of the realtionship.

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