slide8

# slide8 - ECON321 Econometrics Lecture 8 Simple Linear...

This preview shows pages 1–6. Sign up to view the full content.

ECON321 : Econometrics Lecture 8 : Simple Linear Regression Sasan Bakhtiari University of Maryland, College Park Summer 2007 Session II,

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Linear Model I So far the mean of sample was treated as a constant so that x i = μ x + ± i . where ± i is the uncertain part. I Sometime mean changes with some parameter: I Rent = Flat Rent+Price of Utility+some uncertainty I Wage = Fixed wage + Tenure raises+some uncertainty I The uncertainties generally summarize all the other factors we don’t know about or don’t care about.
Simple Linear Regression y i = β 0 + β 1 x i + ± i . I y i is the dependent or response variable. I x i is the independent or predictor variable. I ± i is the random error component. It is generally assumed to have zero mean. I β 0 is the intercept. I β 1 is the slope.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Simple Linear Regression - 6 ? ± i ± ± ± ± ± ± ± ± ± ± ± ± ± ± ± ± ± ± ± ± ± ± x y β 0 β 1
Computing Unknown Parameters I n samles x i and y i are available and β 0 and β 1 need to be determined. I

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 9

slide8 - ECON321 Econometrics Lecture 8 Simple Linear...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online