{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Lecture5_Part2

# Lecture5_Part2 - Ordinary Least Squares SUNY at Albany...

This preview shows pages 1–9. Sign up to view the full content.

SUNY at Albany - Department of Economics Eco 320 Economic Statistics • Regression Ordinary Least Squares

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
SUNY at Albany - Department of Economics Eco 320 Economic Statistics • Regression A. The purpose of regression analysis is to take a purely theoretical population equation like: B. and use a set of sample data to obtain an estimated equation like: C. where each “hat” indicates a sample estimate of true population value and “ Y - hat” is the sample estimate of E ( Y | X s) . K K X X Y ... 1 1 0 K K X X Y ˆ ... ˆ ˆ ˆ 1 1 0
SUNY at Albany - Department of Economics Eco 320 Economic Statistics • Regression 1. What does OLS attempt to do? A. Ordinary Least Squares ( OLS ) is an estimation technique used to obtain numerical values for the coefficients of an otherwise completely theoretical regression equation. Thus, OLS is an estimator, and a produced by OLS is an estimate of the population coefficient. ˆ

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
SUNY at Albany - Department of Economics Eco 320 Economic Statistics • Regression 2. How does OLS work? A. OLS selects the so as to minimize the sum of the squared residuals: s ˆ N i iK K i i i N i i i N i i X X X Y Y Y e 1 2 2 2 1 1 0 1 2 1 2 ) ˆ ... ˆ ˆ ˆ ( ) ˆ (
SUNY at Albany - Department of Economics Eco 320 Economic Statistics • Regression 2. How does OLS work? (continued) B. OLS estimators for simple regression : N i i N i i i X X Y Y X X 1 2 1 1 ) ( ) ( ) ( ˆ ) ( 1 1 0 X Y

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
SUNY at Albany - Department of Economics Eco 320 Economic Statistics • Regression 2. How does OLS work? (continued) B. OLS estimators for simple regression : 2 1 2 1 1 ) , cov( ) ( ) ( ) ( ˆ x N i i N i i i S Y X sample X X Y Y X X ) ( 1 1 0 X Y
SUNY at Albany - Department of Economics Eco 320 Economic Statistics • Regression 2. How does OLS work? (continued) B. OLS estimators for simple regression : X Y S Y X sample X X Y Y X X x N i i N i i i 1 0 2 1 2 1 1 ˆ ˆ ) , cov( ) ( ) ( ) ( ˆ ) ( 1 1 0 X Y

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
SUNY at Albany - Department of Economics Eco 320 Economic Statistics • Regression 2. How does OLS work? (continued) C.
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern