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Unformatted text preview: PHALL-82241 PINDYCK CHAPTER Z01 FIGURE A.1 LEAST SQUARES Sales (S)
50 Si Residual (Si – Si )
A Si = b0 + b1Pi B 40 100
Pi 110 120
Price index ( P) The regression line is chosen to minimize the sum of squared residuals. The residual
associated with price Pi is given by line AB. Fig A-1.eps page 1 of 1 ...
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This note was uploaded on 09/28/2011 for the course ECON 105 taught by Professor Prof.eco during the Spring '11 term at Indian School of Business.
- Spring '11