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I need to determine which model is better at explaining the dependent variable as I have two models (Model 1 and Model 2).

1 year ago in Research Methodology , STATA By Vishal

Research Problem STATA

Determination of dependent variable Models

I need to determine which model is better at explaining the dependent variable as I have two models (Model 1 and Model 2), with different sets and number of independent variables where the variables in Model 1 are selected using Stata command vselect whereas Model 2 using Stata command gsreg. Can I use R2 or lrtest or are there any other alternatives?

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By Himanshu Answered 1 year ago

You can use AIC or BIC and choose the model with the lowest value as it is a flexible measure that many researchers use to determine which model has the best fit. Note that if their AIC/BIC scores are within about 10 of each other, the difference between the two models is considered marginal. While lrtest can only be used if one model is NESTED within the other and R2 for model selection will not provide a reliable statistic.

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