Going Beyond Ordinary with the Ordinary Least Squares Technique
In This Chapter
Getting acquainted with the least squares principle
Pinpointing the residuals
Estimating regression coefficients
Interpreting the magnitude of regression coefficients
Measuring the overall regression fit
Regression analysis refers to techniques that allow you to estimate economic relationships using data. The method used most frequently is commonly known as ordinary least squares (OLS). In this chapter, you discover how to estimate simple regression models with manual calculations and computer calculations. You also find out how to interpret simple and multiple regression models using output from STATA.