INTRODUCTION TO ECONOMETRICS II
ECO 306
NOUN
85
First, when evaluating the influence of a given descriptive variable on the dependent variable, we would now have to face the problem of discriminating between its effects and the effects of the other descriptive variables. Second, we shall have to tackle the problem of model specification. Often some variables might bethought to influence the behaviour of the dependent variable though, they might be unconnected. We shall have to decide which should be included in the regression equation and which should be omitted. However, the arrangement of flow for the multiple regression analysis is to firstly, carryout derivation of formula, then estimation procedures using values, followed by presentation of results and lastly interpretations.
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