INTRODUCTION TO ECONOMETRICS II ECO 306 NOUN 60 It is thus obvious that the properties of the regression coefficients depend critically on the properties of the disturbance term. Indeed the latter
has to satisfy four conditions, known as the Gauss–Markov
conditions, if ordinary least squares regression analysis is to give the best possible results.
If they are not satisfied, the user should be aware of the fact.
If remedial action is possible, he or she should be capable of taking it. If it is not possible, he or she should be able to judge how seriously the results may have been affected.
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