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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.
 Spring '11
 Chan
 Economics

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