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E303lect25F09

E303lect25F09 - Problem Set#7#8 due Monday Lecture 25...

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October 23, 2009 Problem Set #7/ #8 due Monday Lecture 25 REVIEW___________________________________________________: III. Quantitative Demand Analysis c. Estimating Demand: Regression Analysis. Introduction 3. The Coefficient of Determination Note: There is an error in my notes from last time In constructing R 2 , we should break 2 ) ( Y Y i - into 2 2 ) ˆ ( ) ˆ ( - + - i i i Y Y Y Y where the former is the explained variation and the latter is the error (unexplained) variation. 4. Interpreting the Significance of Individual Parameter Estimates. Two comments: - On omitting insignificant variables form a regression . If it is the case that you are interested make statistical claims, do not toss out variables even if they are significant. On the other hand if you are simply trying to get the best fit possible you may throw out anything that is insignificant – you may get an idea of what affects demand in such a circumstance, but you won’t be able to make any statistical claims about it. -
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E303lect25F09 - Problem Set#7#8 due Monday Lecture 25...

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