Wrong Signs in Regression Coefficients

Abstract

When using parametric cost estimation, it is important to note the possibility of the regression coefficients having the wrong sign. A wrong sign is defined as a sign on the regression coefficient opposite to the researcher's intuition and experience. Some possible causes for the wrong sign discussed in this paper are a small range of x's, leverage points, missing variables, multicollinearity, and computational error. Additionally, techniques for determining the cause of the wrong sign are given.