Econ103_Lec1

Perfect modelr2 1 where 0 r2 1 example r2 080

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: (xt (n x)(yt 1)sx sy y) , 1r1 r =0 4 Regression 4 of 9 •  Coefficient of DeterminaTon (R2 or r2): FracTon of the data’s variaTon accounted for by the model. Perfect modelR2 = 1 where 0 R2 1 •  Example: R2 =0.80 Data [y] = Model[ŷt] + Residuals[et] 100% = 80% + 20% •  Residuals: If the linear model is a good model for the data, there should be no structure in the plot of the residuals vs. x (or vs. ŷ). It should look like random points. 5...
View Full Document

This note was uploaded on 10/13/2013 for the course ECON 103 taught by Professor Sandrablack during the Fall '07 term at UCLA.

Ask a homework question - tutors are online