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Unformatted text preview: E ( Y i  X i ) = 482 . 55 X i Compute the stochastic error term. Compare OLS residuals with the actual error term. Are they diﬀerent? Explain. 1 Q3. Sir Francis Galton, a cousin of James Darwin, examined the relationship between the height of children and their parents towards the end of the 19th century. It is from this study that the name regression originated. You decide to update his ﬁndings by collecting data from 110 college students, and estimate the following relationship: d Studenth i = 19 . 6 + 0 . 73 Midparh i S.E = (7 . 2) (0 . 10) N = 110 ,R 2 = 0 . 45 (1) where Studenth is the height of students in inches, and Midparh is the average of the parental heights. (a) Interpret the estimated coeﬃcient of Midparh , ˆ β 1 = 0 . 73. (b) Based on above results what is the prediction for the height of a child whose parents have an average height of 70.06 inches? 2...
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 Winter '07
 OGAKI
 Econometrics, Regression Analysis, stochastic error term

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