Comments invited on a new feature in CVS/snapshot. It's a
Frisch-Waugh-Lovell type thing, maybe useful in pedagogy.
Look under "/View/Graph specified vars/X-Y with control...". You
get to specify an X variable, a Y variable, and a Z or "control"
variable, whose effects will be taken out of both X and Y. That
is, the result is a scatterplot of (residuals from regression of Y
on Z) against (residuals from regression of X on Z). (If you want
to control for more than one "Z" variable, do it yourself with a
script!)
A nice example, I think, is Ramanathan's data4-3. Try plotting
housing starts against gnp, and housing starts against "intrate"
(mortgage interest rate). There's nothing to see (hint: there's a
strong positive correlation between gnp and intrate in this
sample). Now plot housing starts against gnp, controlling for
intrate, and housing starts against intrate, controlling for gnp.
Ah, now there _is_ something to see.
(The title of the "controlled" graph still needs to be changed to
properly reflect what's going on.)
Allin.
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