Lecture5_Part1

Lecture5_Part1 - SUNY at Albany Department of Economics Eco...

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Unformatted text preview: SUNY at Albany - Department of Economics Eco 320 Economic Statistics • Regression SUNY at Albany - Department of Economics Eco 320 Economic Statistics • Regression Regression Analysis 1. What is Regression Analysis? SUNY at Albany - Department of Economics Eco 320 Economic Statistics • Regression 1. What is Regression Analysis? SUNY at Albany - Department of Economics Eco 320 Economic Statistics • Regression 1. What is Regression Analysis? A. Conditional Expected values B. Population regression line (PRL) • Average (mean) values of the dependent variable • PRL passes through the conditional means of Y. • ? ? = 1 + 2 ? C. Parameter/regression coefficients • Intercept • Slope SUNY at Albany - Department of Economics Eco 320 Economic Statistics • Regression 1. What is Regression Analysis? SUNY at Albany - Department of Economics Eco 320 Economic Statistics • Regression 1. What is Regression Analysis? A. Population regression function (PRL) ? = 1 + 2 ? + • 1 + 2 ? systematic/deterministic component • nonsystematic/random component - Variables not explicitly included in the model - Inherent randomness in human behavior - Errors of measurement - Keep the model simple SUNY at Albany - Department of Economics Eco 320 Economic Statistics • Regression 1. What is Regression Analysis? SUNY at Albany - Department of Economics Eco 320 Economic Statistics • Regression SUNY at Albany - Department of Economics Eco 320 Economic Statistics • Regression 1. What is Regression Analysis? A. Sample regression lines (SRLs) ? = 1 + 2 ? - ? : estimator of ? ? - 1 : estimator of 1- 2 : estimator of 2 ? = 1 + 2 ? + - (residual term): estimator of B. Summary: Our primary objective in regression analysis is to estimate the (stochastic) PRF on the basis of the SRF. SUNY at Albany - Department of Economics Eco 320 Economic Statistics • Regression SUNY at Albany - Department of Economics Eco 320 Economic Statistics • Regression SUNY at Albany - Department of Economics Eco 320 Economic Statistics • Regression SUNY at Albany - Department of Economics Eco 320 Economic Statistics • Regression 1. What is Regression Analysis? A. The goal of most empirical studies in economics and other social sciences is to determine whether a change in one variable, say x , causes a change in another variable, say y , and by how much? SUNY at Albany - Department of Economics Eco 320 Economic Statistics • Regression SUNY at Albany - Department of Economics Eco 320 Economic Statistics • Regression 1. What is Regression Analysis?...
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This note was uploaded on 02/08/2012 for the course ECON 320 taught by Professor Chan during the Spring '11 term at SUNY Albany.

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Lecture5_Part1 - SUNY at Albany Department of Economics Eco...

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