7 Regression diagnostics
There are some assumptions that must be fulfilled, so the regression will yield correct results (Wooldridge, 2016: 73–83; Meuleman, Loosveldt, Emonds, 2015). Therefore, it is strongly recommended to test these assumptions to see whether you can trust your conclusions. When you find out that there are great problems in the data, it might be a good idea to redo analyses, or find other data sources. The least you can do is report all the violations, so others can regard this when reading your paper.
If not otherwise stated, all diagnostics are applied to the following model we used in chapter six:
sysuse nlsw88, clear
regress wage c.ttl_exp i.union i.south c.grade
7.1 Exogeneity
The term exogeneity describes that the expected ...
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