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: written as Y = α + β X + u, Assume it is the true population model. Some terminologies In the above simple linear regression model, 1 α and β are regression coefficients (or parameters) to be estimated; they are unknown constants. α = intercept β = slope We typically refer to Y as the Dependent Variable, Left-Hand Side Variable, Explained Variable, or Regressand. We typically refer to X as Independent Variable, Right-Hand Side Variable, Explanatory Variable, Regressor, Covariate. What is u here? Example: Y=GPA, X=hours of study per week. GPA Study hours/week 3.5 25.0 2.0 10.0 2.2 12.0 3.5 15.0 2.5 20 … … Figure: A scatter plot of GPA and Study hours/week A coordinate system: good for displaying two variables on a single graph This graph is called a scatter plot. Note that the observations are not on a straight line! This means that X and Y do not have an exact or deterministic linear relationship (Imagine they do, 2 then once you have some data to estimate α and β , then you can predict the outco...
View Full Document

Ask a homework question - tutors are online