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Multicollinearity and maximum entropy leuven estimator


  • Sudhanshu Mishra

    () (North-Eastern Hill University)


Multicollinearity is a serious problem in applied regression analysis. Q. Paris (2001) introduced the MEL estimator to resolve the multicollinearity problem. This paper improves the MEL estimator to the Modular MEL (MMEL) estimator and shows by Monte Carlo experiments that MMEL estimator performs significantly better than OLS as well as MEL estimators.

Suggested Citation

  • Sudhanshu Mishra, 2004. "Multicollinearity and maximum entropy leuven estimator," Economics Bulletin, AccessEcon, vol. 3(25), pages 1-11.
  • Handle: RePEc:ebl:ecbull:eb-04c10016

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    References listed on IDEAS

    1. Quirino Paris, 2001. "Multicollinearity and maximum entropy estimators," Economics Bulletin, AccessEcon, vol. 3(11), pages 1-9.
    2. Golan, Amos & Judge, George G. & Miller, Douglas, 1996. "Maximum Entropy Econometrics," Staff General Research Papers Archive 1488, Iowa State University, Department of Economics.
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    Cited by:

    1. Mishra, SK, 2012. "A comparative study of trends in globalization using different synthetic indicators," MPRA Paper 38028, University Library of Munich, Germany.
    2. Sudhanshu K. MISHRA, 2016. "Shapley Value Regression and the Resolution of Multicollinearity," Journal of Economics Bibliography, KSP Journals, vol. 3(3), pages 498-515, September.
    3. Mishra, SK, 2004. "Estimation under Multicollinearity: Application of Restricted Liu and Maximum Entropy Estimators to the Portland Cement Dataset," MPRA Paper 1809, University Library of Munich, Germany.

    More about this item


    maximum entropy;

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General


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