ECO220Y1 Lecture Notes - Lecture 18: Heteroscedasticity, Panel Data, Homoscedasticity
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ECO220Y1 Full Course Notes
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Intercept of regression generally does not have interpretation. Slope: for every extra inch of father"s height, son is on average half an inch taller: : predicted y for a given x. % of variation in y explained by variation in x. Ols is not an estimate of demand curve. Demand shifters affect price profit-maximizing firms choose to set. 0 and 1 represent intercept and slope parameters. Regression equation is linear in the error and parameters. Always check assumption 1 before considering assumption 3. Heteroscedasticity is often a by product of violation of linearity assumption. Only important if making forecast about individuals: exists in population.
