Suppose you estimate a regression using 20 observations and 16 independent variables You compute R 2 to be 98 Explain why R 2 may not be an appropriate measure of the goodness of fit Can you think of a better one ...

Explanation of R Limitation In the context of regression analysis with a high number of independent variables 16 in this case and a relatively small n ...

Suppose you estimate a regression using 20 observations and 16 independent variables. You compute R 2 to

Question:

Suppose you estimate a regression using 20 observations and 16 independent variables. You compute R² to be .98. Explain why R² may not be an appropriate measure of the goodness of fit. Can you think of a better one?

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