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Chapter 2

Chapter 2. Introductory Econometrics: A Modern Approach, 4 th ed. By Jeffrey M. Wooldridge. 2.1 Definition of the Simple Regression Model. In the simple linear regression model, where y = ? 0 + ? 1 x + u (2.1)

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The Simple Regression Model

The Simple Regression Model. y = b 0 + b 1 x + u. Some Terminology. In the simple linear regression model, where y = b 0 + b 1 x + u , we typically refer to y as the Dependent Variable, or Left-Hand Side Variable, or Explained Variable, or Regressand.

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The Simple Regression Model

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Review

Review. Regression Model Assumptions Calculus Derivation, critical points (Excel, plots, etc.) Deriving OLS estimators (b 0 , b 1 ) Excel calculation of OLS results Steps, plots, analysis Larger models Model interpretation Residual Analysis Diagnosing problems. Exam Procedures.

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Chapter 2

The Simple Regression Model

The Simple Regression Model

Review