ECO220Y1 Lecture 19: Lecture 19
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ECO220Y1 Full Course Notes
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Introduction: last lecture, we introduced 6 conditions that must be satis ed to make statistical inference about the regression line, today, we discuss statistical inference about the regression line, focussing on the slope parameter. 2 standard error for the slope: b1 is the estimate of the true slope in the population, i. e. 1, as any other estimates that we discussed (e. g. p, y), it has a sampling distribution. The reason for this sampling distribution is that di erent samples would give di erent estimates of the same parameter in the population: in order to make inference about 1 using its sample counterpart b1, we need to know: Intuition: we get a better feeling of the e ect of x on y if we observe many di erent values of x: n: b1 is more precisely estimated if we have a larger sample. Intuition: this was also true for sep pq and sep yq.