# Random Coefficients Regression - PowerPoint PPT Presentation

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Random Coefficients Regression. RPD – Section 18.3. Basic Model. Simple Linear Regression where each of n experimental units is observed at t points in time (typically) . General Model ( Gumpertz and Pantula (1989)).

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Random Coefficients Regression

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## Random Coefficients Regression

RPD – Section 18.3

### Basic Model

• Simple Linear Regression where each of n experimental units is observed at t points in time (typically)

### General Model (Gumpertz and Pantula (1989))

• Possibly Multiple Linear Regression where each of n experimental units is observed at t points in time, based on regression with k parameters

### Example – Annual Air Revenues for 10 Markets

• Random Sample of n = 10 large air markets (City Pairs), each observed over 5 years

• Y = ln(Average Fare * Average weekly Passengers)

• X = Year (1996/7=0, 2000/1=4) – Note: All Cities have same levels of X (not necessary for the method)