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Normality in The Residual - Hossain Academy Note

This document discusses normality in residuals from regression analysis. It notes that for large sample sizes, the central limit theorem implies residuals will converge to normality regardless of the underlying data distribution. If transformations do not resolve issues like autocorrelation or heteroskedasticity, alternative tests like Newey-West can be used. The document also shows a figure of residuals and notes comments from professors. One professor said statistical tests are not needed to check normality of residuals, as some non-normality does not invalidate regression results.

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Abdullah Khatib
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136 views2 pages

Normality in The Residual - Hossain Academy Note

This document discusses normality in residuals from regression analysis. It notes that for large sample sizes, the central limit theorem implies residuals will converge to normality regardless of the underlying data distribution. If transformations do not resolve issues like autocorrelation or heteroskedasticity, alternative tests like Newey-West can be used. The document also shows a figure of residuals and notes comments from professors. One professor said statistical tests are not needed to check normality of residuals, as some non-normality does not invalidate regression results.

Uploaded by

Abdullah Khatib
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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2020/3/28 Normality in the residual - Hossain Academy Note

Normality in the residuals

Hossain Academy Note

EDITOR
Sayed Hossain Normality in the residual

AUTHORS 1. Normality assumption


Abu Subhi
Ade Kutu Professor Sudarshan Bhattacharjee commented about diagnostic checking as such >>
Afolabi Luqman the data series is sufficiently large... about more than 30 0bservations then you can ign
Abdullah Sonnet
Asad Zaman the violation of normality assumption coz by central limit theorem a long series will
Atiq Rehman converge to normality.... for auto-correlation and heteroskedasticity we can try first som
Burcu Özcan
Ghumro Niaz Hussain
transformation in the variables.... however, if that does not work then use Newey-West
Muhammad Anees test for HC and HAC... This is readily available in R and Stata... Not sure about Eviews
Mohammad Zhafran
Muzammil Bhatti
hope this helps..
Monis Syed
Mine PD
Moulana N. Cholovik
Muili Adebayo Hamid 2. Normality in the residual
Nicat Gasim
Najid Iqbal
Professor Sayed Hossain posted the following figure.
Nasiru Inuwa
Noman Arshed
Rapelanoro Nady
Seye Olasehinde-Williams
Suborno Aditya
Sayed Hossain
Shishir Sakya
Sheikh Muzammil Naseer
Tella Oluwatoba Ibrahim
Younes Azzouz

POPOLAR BLOGS
Dave
Meo School of Research
Shishir Shakya
Noman Arshed

Univariate Models

Moritz J. Sch commented> shouldn't we rather state: "we fail to reject the null" instead
"accept the null"?

Sayed Hossain commented> Fail to reject null sounds good

Moritz J. Sch commented> This has somehow become the standard phrase in empiric
work. My professor never got tired of mentioning, that "accepting" is a horrible
misconception, because the null must not necessarily be true, especially with a p-Value

Muhammad Anees commented> In research and as per the Williams, Elements of Styl
double negatives sounds good :)

George Savva commented> You should not use any statistical test for normality of
residuals. Whether they are 'significantly' non-normal is not important for the validity of
Multivariate Models regression.

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2020/3/28 Normality in the residual - Hossain Academy Note

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