TEST 2

TEST 2 - AdjustedR2: :. denotedH1.Basespecification:Abaselin

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Adjusted R2( ):  A modified version of R2 that does not necessarily increase when a new regressor is added to the regression.  Alternative hypothesis:  The hypothesis that is assumed to be true if the null hypothesis is false. The alternative hypothesis is often  denoted H1.  Base specification:  A baseline or benchmark regression specification that includes a set of regressors chosen using a  combination of expert judgment, economic theory, and knowledge of how the data were collected.  Bonferroni Test:  One at a time t-stat  test. B 1 =B 1,0  2 =B 2,0  based on the critical value c>0. Accept if [t 1 ] <  c and if [t 2 ] <  c; otherwise reject.   Constant regressor:  The  regressor associated with the regression intercept; this regressor is always equal to 1.  Constant term:  The regression intercept.  Control variable:  Another term for a regressor; more specifically, a regressor that controls for one of the factors that determine the  dependent variable.  Dependent variable:  The variable to be explained in a regression or other statistical model; the variable appearing  on the left-hand side in a regression. Dummy variable trap:  A problem caused by including a full set of binary variables in a regression  together with a constant regressor (intercept), leading to perfect multicollinearity.  Error term:  The difference between Y and the  population regression function, denoted by u in this textbook.   Explained sum of squares (ESS):  The sum of squared deviations of the  predicted values of Yi, ,from their average. F-statistic:  A statistic used to a test joint hypothesis concerning more than one of the  regression coefficients.  Gauss-Markov theorem:  Mathematical result stating that, under certain conditions, the OLS estimator is the 
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This note was uploaded on 02/17/2011 for the course ECO 4421 taught by Professor Mason during the Fall '10 term at FSU.

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TEST 2 - AdjustedR2: :. denotedH1.Basespecification:Abaselin

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