2. Types of Variables

Dependent Variables

The dependent variable is also called a criterion variable which is applied in non-experimental circumstances. The dependent variable has relied on the independent variable. From the above-mentioned example, the project’s productivity or completion is the main criteria that are dependent on estimated time and IQ. Here, the independent variables are IQ and estimated time, which may or may not reflect in an employee’s productivity. So the extension of estimated time or enhancing the IQ of a person doesn’t make any sense in employee’s productivity as it is not predictable.

Hence, the managers’ focus is to work on the independent variables such as allotted time and IQ that leads to certain changes in employee’s productivity that are the dependent variables. So both the variables are connected in some measures. The variables which get affected by other variables in econometrics is termed as endogenous variables. A hidden variable impacts the relationship between the dependent and independent variable called lurking variables. When an independent variable is not impacted by any other variables and is restricted to a certain extent are called an explanatory variable.

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