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Essential Statistics, Regression, and Econometrics by Gary Smith

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CHAPTER 8

Simple Regression

Chapter Outline

8.1 The Regression Model

8.2 Least Squares Estimation

8.3 Confidence Intervals

8.4 Hypothesis Tests

8.5 R2

8.6 Using Regression Analysis

Okun’s Law Revisited

The Fair Value of Stocks

The Nifty 50

8.7 Prediction Intervals (Optional)

Exercises

“The cause of lightning,” Alice said very decidedly, for she felt quite sure about this, “is the thunder—no, no!” she hastily corrected herself. “I meant it the other way.” “It’s too late to correct it,” said the Red Queen. “When you’ve once said a thing, that fixes it, and you must take the consequences.”

Lewis Carroll, Alice in Wonderland

Regression models are used in the humanities, social sciences, and natural sciences to explain complex phenomena. Linguistic ...

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