Regression and OLS Flashcards
1
Q
Regression
A
describes and evaluates the relationship between dependent and independent variables by using sample data
2
Q
Disturbance term
A
unobserved errors in a population
- left out determinants
- errors
- random outside influence which cannot be modeled
3
Q
OLS
A
a method used to fit a line to the data (ordinary least squares)
–> take each distance from the observations to the fitted line, square it, and minimize the total sum of the squares
4
Q
Residual
A
observed errors in the sample data
u^ = y - y^
5
Q
Derivatives (gradients)
A
When a function reaches its maximum, its second derivative is negative, and vice versa
6
Q
Standard error
A
measures how reliable and/or precise an estimator is
7
Q
TSS=…
A
ESS + RSS
(expected sum of squares + residual sum of squares)
8
Q
A
