In statistical practice multicollinearity of predictor variables is rather the rule than the exception and appropriate models are needed to avoid instability of predictions. Feature extraction methods reflect the idea that latent variables not measurable directly are underlying the original...

In this paper, we investigate the methodological issue of determining the number of state variables required for options pricing. After showing the inadequacy of the principal component analysis approach, which is commonly used in the literature, we adopt a nonparametric regression technique...

Descriptive studies on the European Union’s global image reveal generally favourable feelings towards the European Union on the part of citizens outside Europe. However, European Union perceptions vary considerably across countries. This article argues that these patterns can be...

Applications of multilevel models to continuous outcomes nearly always assume constant residual variance and constant random effects variances and covariances. However, modeling heterogeneity of variance can prove a useful indicator of model misspecification, and in some educational and...

As recession and financial crisis spread across Europe an increasing number of people are at risk of poverty and social exclusion. Children are more exposed to the risk of poverty and social exclusion than the overall population of the EU. The current climate of economic downturn calls out for...

Much research in health economics revolves around the analysis of hierarchically structured data. For instance, combining characteristics of patients with information pertaining to the general practice (GP) clinic providing treatment is called for in order to investigate important features of...