Term

Definition
1)Model is Linear in the Parameters 2) The X Variable is Uncorrelated with the U disturbance term 3) E(u/Xi) = 0 4) Each ui variance is homoskedastic (constant) 5) No correlation between two error terms 6) No specification bias (all relevant variables included) 7) ui is normally distributed (mean 0, variance sigma^2) 


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Definition
min(b1,b2,b3)Sigma(e^2) = RSS = Sigma(Yi  b1  b2x2  b3x3...)^2 


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Goodness of Fit/R^2 equation 

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Partial Regression Coefficient 

Definition
Reflects the (partial) effect of one explanatory variable on the mean value of the dependent variable when the values of other explanatory variables included in the model are held constant. 


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Coefficient of Determination 

Definition
The proportion in variation of the dependent variable explained by all independent variables in the regression model. 


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Definition
Multiple (exact) linear relationships exist between variables in an estimated multiple regression function. 


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lnY = B1 + B2LnX (elasticity) 


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Definition
Y = B1 + B2X + B3X^2 + B4X^3 


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DubinWatson Statistic EQN 

Definition
d= (Sum(Et  E(t1))/(Sum Et^2) or d approx = 2(1p) (p: Covariance of Et & Et1 


Term
Correct Variance Methods (3) 

Definition
1) Divide through by SQRT variance 2) Divide through by SQRT of X 3) Divide through by X 


Term
Dummy Variable Regression Iterations (4) 

Definition
1) Coincidental Regression 2) Concurrent Regression 3) Parallel Regressions 4) Dissimilar Regressions 

