1Tutorial on Using Excel to Run OLS The objective of this reading assignment is to guide you through the mechanics necessary to perform an OLS regression in Excel. Obviously, the first step is to open Excel. Assuming Excel is open, an OLS regression is performed as follows. Step One - Entering Data Your data must be in columns. The columns do not have to have a label, but labeling your data will make reading the results easier. Data for the independent variables must be in adjacent columns. It is ok to manipulate your data (such as squaring a variable), but before running the regression, make sure all the independent variables are in adjacent columns. The dependent variable and independent variables do not have to be in adjacent columns. The data set-up for this example is shown in the following figure. The dependent variable is labeled “output” and the independent variables are labeled “land, labor, capital.” Create a worksheet that has the following data as shown in the worksheet below. The tutorial works best if data is entered in the cells shown. As will be shown later, you do not have to enter the column of ones associated with the intercept.
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