3. Suppose that you want to predict the two-year growth rate of medium-sized firms in your country with the help of pred
Posted: Wed May 11, 2022 10:39 am
3. Suppose that you want to predict the two-year growth rate of
medium-sized firms in your country with
the help of predictors. When your data has a large set of
predictors, what would be your strategy for
model selection/model building?
a) It would be always optimal to use all the predictors.
b) Among several models, the best model should be selected based on
their R-squared (R2)
c) It would be better to use the size of the firms as a
predictor.
d) Since it is hard to try out all possible combinations of
predictors, it would be better to implement LASSO and ridge
regression for modeling
LASSO and Ridge regression for model building.
medium-sized firms in your country with
the help of predictors. When your data has a large set of
predictors, what would be your strategy for
model selection/model building?
a) It would be always optimal to use all the predictors.
b) Among several models, the best model should be selected based on
their R-squared (R2)
c) It would be better to use the size of the firms as a
predictor.
d) Since it is hard to try out all possible combinations of
predictors, it would be better to implement LASSO and ridge
regression for modeling
LASSO and Ridge regression for model building.