Estimate the model again without non significant variables.compare the models : corrected coefficient of determination and information criteria the higher corrected coefficient of determination the better model is.

Econometric mode

Gretl – a statistical package

1. Write the variable y after the estimation

2. Check the statistical significance of every variable X_i.

3. Check the coefficient of determination – percentage of the explained variation

4. remove of non significant variables

5. Estimate the model again without non significant variables

6. compare the models : corrected coefficient of determination and information criteria the higher corrected coefficient of determination the better model is.

the lower information criteria the better model is.

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