Ozili, Peterson K (2023): The acceptable Rsquare in empirical modelling for social science research. Forthcoming in:
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Abstract
This commentary article examines the acceptable Rsquare in social science empirical modelling with particular focus on why a low Rsquare model is acceptable in empirical social science research. The paper shows that a low Rsquare model is not necessarily bad. This is because the goal of most social science research modelling is not to predict human behaviour. Rather, the goal is often to assess whether specific predictors or explanatory variables have a significant effect on the dependent variable. Therefore, a low Rsquare of at least 0.1 (or 10 percent) is acceptable on the condition that some or most of the predictors or explanatory variables are statistically significant. If this condition is not met, the low Rsquare model cannot be accepted. A high Rsquare model is also acceptable provided that there is no spurious causation in the model and there is no multicollinearity among the explanatory variables.
Item Type:  MPRA Paper 

Original Title:  The acceptable Rsquare in empirical modelling for social science research 
Language:  English 
Keywords:  Rsquare, low Rsquare, social science, research, empirical model, modelling, regression. 
Subjects:  C  Mathematical and Quantitative Methods > C1  Econometric and Statistical Methods and Methodology: General > C10  General C  Mathematical and Quantitative Methods > C1  Econometric and Statistical Methods and Methodology: General > C14  Semiparametric and Nonparametric Methods: General C  Mathematical and Quantitative Methods > C1  Econometric and Statistical Methods and Methodology: General > C15  Statistical Simulation Methods: General C  Mathematical and Quantitative Methods > C3  Multiple or Simultaneous Equation Models ; Multiple Variables > C30  General C  Mathematical and Quantitative Methods > C5  Econometric Modeling > C50  General C  Mathematical and Quantitative Methods > C5  Econometric Modeling > C51  Model Construction and Estimation 
Item ID:  116496 
Depositing User:  Dr Peterson K Ozili 
Date Deposited:  24 Feb 2023 09:20 
Last Modified:  24 Feb 2023 09:20 
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URI:  https://mpra.ub.unimuenchen.de/id/eprint/116496 
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The acceptable Rsquare in empirical modelling for social science research. (deposited 26 Dec 2022 14:32)
 The acceptable Rsquare in empirical modelling for social science research. (deposited 24 Feb 2023 09:20) [Currently Displayed]