P1 - Econ 444 Elementary Econometrics(Fall 2007 SUMMARY of...

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Econ 444 Elementary Econometrics (Fall 2007) SUMMARY of CHAPTER 1 and HOMEWORK EXERCISE: 1 Due at the beginning of class on Monday, October 1 1 KEY TERMS AND CONCEPTS Dependent variable. Independent, or explanatory, variable. Population regression: E ( Y j X ) = & 0 + 1 X: (1) Regression coe¢ cients (constant, or intercept, term, & 0 , and slope coe¢ cient, 1 . Stochastic error, term ± : Y = & 0 + 1 X + ±: (2) Sample regression equation ^ Y i = ^ & 0 + ^ 1 X i (3) Residual e i : e i = Y i ^ Y i (4) 2 HOMEWORK EXERCISES: 1 1. State with reasons whether the following statements are true or false. (1.a) The stochastic error term ± i and the residual e i mean the same thing, and their values are the same in each application. (1.b) The population Regression and the sample Regression are always the same when OLS is used to compute the sample regression. 1
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(1.c) The residual e i is always zero for each i when OLS is correctly applied to data. 2.
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This note was uploaded on 07/17/2008 for the course ECON 444 taught by Professor Ogaki during the Fall '07 term at Ohio State.

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P1 - Econ 444 Elementary Econometrics(Fall 2007 SUMMARY of...

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