Regression Models

The Significance Of The Stochastic Disturbance Term

As noted in Section 2.4, the disturbance term ui is a surrogate for all those variables that are omitted from the model but that collectively affect Y. The obvious question is Why not introduce these variables into the model explicitly Stated otherwise, why not develop a multiple regression model with as many variables as possible The reasons are many. 1. Vagueness of theory The theory, if any, determining the behavior of Y may be, and often is, incomplete. We might know for certain that weekly...

Demaris Logit Model Smsa

Notes All financial variables are in thousands of dollars. Housing status Rent 1 if rents 0 otherwise Housing status Own 1 if owns 0 otherwise Source Janet A. Fisher, An Analysis of Consumer Good Expenditure, The Review of Economics and Statistics, vol. 64, no. 1, Table 1, 1962, p. 67. Notes All financial variables are in thousands of dollars. Housing status Rent 1 if rents 0 otherwise Housing status Own 1 if owns 0 otherwise Source Janet A. Fisher, An Analysis of Consumer Good Expenditure, The...