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R-Squared vs Adjusted R-Squared: The Ultimate Econometrics Trap
Why do econometrics students trust R-Squared (R^2) too much? In this video, we break down why a high R-squared value can be incredibly misleading and explain the common trap most students fall into when analyzing regression models. While R-squared tells us what proportion of the variation in Y is explained by the model, it has a major flaw: it ...
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