Nagaland

Step 1: Correlation Matrix

Highlighted the values where correlation between independent variable is >75%

GDOR

TEACHER
S

CAPEXPE
DU

GSDP

TPR

PRIMARYS
CHOOLS

ER

SWG

EXPSSA

PCI

GDOR
TEAC
HERS
CAPE
XPED
U
GSDP

1.000000
0.426280

1.000000
0.308622

1.000000

0.757613

0.651026

1.000000

0.438498

0.532653

0.476506

1.000000

0.665601

0.799339

0.847699

0.779299

1.000000

0.552642

0.535812

0.499501

0.882910

0.684113

1.000000

0.374633

-0.186567

0.104872

0.179148

0.123616

0.042579

0.389412

-0.044404

0.300921

0.290237

0.341895

0.206563

0.839072

0.404801

0.890605

0.288903

0.637753

0.377784

0.016798

0.011791
TPR
PRIMA
RYSCH
OOLS

0.083530
0.074293

ER
0.014196
SWG
EXPS
SA
PCI

0.080380
0.371750
0.139327

1.000000

Step 2: Regression with all the independent variables considered:

Dependent Variable: GDOR
Method: Least Squares
Date: 12/28/14 Time: 15:06
Sample: 1 11
Included observations: 11
Variable

Coefficient

Std. Error

t-Statistic

Prob.

C
TEACHERS
CAPEXPEDU
GSDP
TPR
PRIMARYSCHOOLS
ER
SWG
EXPSSA
PCI

-265.2456
-0.059982
-0.000394
-0.005782
-6.257427
0.441687
0.000665
-0.021132
-0.007995
0.008213

325.7748
0.018460
0.000201
0.007762
2.726965
0.280692
0.000195
0.078379
0.004871
0.006495

-0.814199
-3.249272
-1.961143
-0.744910
-2.294649
1.573568
3.414692
-0.269615
-1.641369
1.264476

0.5650
0.1901
0.3002
0.5924
0.2616
0.3604
0.1814
0.8323
0.3484
0.4260

R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
Durbin-Watson stat

0.993509
0.935094
1.967084
3.869420
-9.861976
2.607949

Mean dependent var

S.D. dependent var
Akaike info criterion
Schwarz criterion
F-statistic
Prob(F-statistic)

51.98000
7.721129
3.611268
3.972991
17.00769
0.186157

0.022275

1.000000

0.319308

0.403906

1.000000

Step 3: Now removed the independent variables which are correlated i.e., GSDP
Dependent Variable: GDOR
Method: Least Squares
Date: 12/28/14 Time: 19:02
Sample: 1 11
Included observations: 11
Variable

Coefficient

Std. Error

t-Statistic

Prob.

C
TEACHERS
CAPEXPEDU
TPR
PRIMARYSCHOOLS
EXPSSA
PCI
SWG
ER

-23.63334
-0.046645
-0.000247
-4.408961
0.234558
-0.004409
0.003391
0.035959
0.000541

26.82749
0.003963
3.11E-05
0.997051
0.033815
0.000653
0.000474
0.014469
8.88E-05

-0.880937
-11.77091
-7.938414
-4.422003
6.936597
-6.754427
7.159531
2.485199
6.088067

0.4713
0.0071
0.0155
0.0475
0.0202
0.0212
0.0190
0.1309
0.0259

R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
Durbin-Watson stat

0.989908
0.949539
1.734435
6.016528
-12.28971
2.823015

Mean dependent var

S.D. dependent var
Akaike info criterion
Schwarz criterion
F-statistic
Prob(F-statistic)

51.98000
7.721129
3.870856
4.196406
24.52170
0.039762

Multicolinearity statistics:
Statistic
GDOR TEACHERS CAPEXPEDU
TPR
PRIMARYSCHOOLS
R
0.990
0.999
0.998
0.997
0.999
Tolerance 0.010
0.001
0.002
0.003
0.001
VIF
99.087
856.007
432.592
349.015
963.732
The R^2 value is high at 98.99% but the variable SWG is not significant.

ER
0.997
0.003
378.960

Step 4: Now removed the insignificant variables and developed the regression model.
Dependent Variable: GDOR
Method: Least Squares
Date: 12/28/14 Time: 19:24
Sample: 1 11
Included observations: 11
Variable

Coefficient

Std. Error

t-Statistic

Prob.

C
TEACHERS
CAPEXPEDU
TPR
PRIMARYSCHOOLS
ER
EXPSSA
PCI

-19.24727
-0.043173
-0.000249
-3.013648
0.211189
0.000421
-0.005089
0.003825

44.19302
0.006122
5.13E-05
1.360233
0.053622
0.000123
0.000978
0.000727

-0.435527
-7.052145
-4.853414
-2.215537
3.938481
3.419680
-5.201559
5.262521

0.6926
0.0059
0.0167
0.1135
0.0292
0.0419
0.0138
0.0134

R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
Durbin-Watson stat

0.958742
0.862474
2.863343
24.59621
-20.03416
2.511378

Mean dependent var

S.D. dependent var
Akaike info criterion
Schwarz criterion
F-statistic
Prob(F-statistic)

51.98000
7.721129
5.097119
5.386498
9.959065
0.042770

SWG
0.907
0.093
10.717

EXPSSA
0.982
0.018
55.943

PCI
0.993
0.007
147.189

Multicollinearity statistics:

Statistic
R
Tolerance
VIF

GDOR
0.959
0.041
24.23
8

TEACHE
RS
0.995
0.005
187.493

CAPEXPE
DU
0.992
0.008

TPR
0.983
0.017

117.694

58.302

PRIMARYSCHO
OLS
0.995
0.005
218.965

ER
0.985
0.015

EXPSSA
0.948
0.052

PCI
0.980
0.020

66.827

19.402

48.865

GDOR = -19.24726696 - 0.04317276405*TEACHERS - 0.0002491063713*CAPEXPEDU + 0.211188747*PRIMARYSCHOOLS +

0.0004206027889*ER - 0.005088510093*EXPSSA + 0.003825398316*PCI - 3.013647528*TPR

Gross dropout rate = 94.729 0.000598 * (Enrollment) - 0.000670 * (Per Capita Income) + 0.8675 * (Teacher Pupil ratio) - 0.0044
* (No. of trained teachers)