ECON 3411 Lecture Notes - Lecture 20: Regression Analysis, Observational Error, Standard Deviation
19 Jan 2018
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Document Summary
A 10 percent increase in rainfall will lead to a 30 percent increase in the demand for raincoats. Regression analysis: how does one obtain information on the demand function, true (or population) regression model. Statistical technique called regression analysis using data on quantity, price, income and other important variables. Squares regression (cid:1857) (cid:1853) unknown population intercept (cid:1851) = (cid:1853) + (cid:1854)(cid:1850) + (cid:1857) random error term with mean zero and standard deviation . Page 1 of 3 (cid:1851) = (cid:1853) + (cid:1854) (cid:1850) (cid:1853) least squares estimate of the unknown parameter (cid:1853). Measure of how much each estimated coefficient varies in regressions based on the same true demand model using different data: confidence interval rule of thumb. When || > 2, we are 95 percent confident the true parameter is in the regression is not zero. t-statistics rule of thumb.
