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  • mean of the residuals

    I have a question. I am dealing with monthly electricity production. After detrending my variables by keeping the residuals I calculate the mean for the two countries, and I get the same result but with an opposite sign. For example, I would get 18 for country A and -18 for country B. is that normal or am I doing something wrong ?
    Last edited by lisa carnicelli; 02 Aug 2018, 14:12.

  • #2
    Assuming then equal number of observations for each country, your residuals average zero. Without knowing how you detrended, one can't be certain, but that sounds expected.

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    • #3
      I am working with monthly panel data and my model suffers from seasonality. So I have created a dummy for each month, and I have regressed the variable on the monthly dummies. Finally I saved the residuals.

      this is the command:

      regress total Aug Sep Oct Nov Dec Jan Feb Mar May Apr Jun, r
      predict totG, resid

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      • #4
        Mean zero for residuals is guaranteed in principle as a consequence of what you are doing. That should be explained somewhere in most if not all regression texts.

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