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Pertemuan 5

wjisdguqawvsxdvu

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Abdullah
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5 views12 pages

Pertemuan 5

wjisdguqawvsxdvu

Uploaded by

Abdullah
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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E C O N O M E T R I C S 1

23 SEPTEMBER 2020
Specification of the model (cntd)
In Mathematical (linear) form:

Y = b1 + b2X

where Y = sleep and X = totwork

b1 & b2 = parameters

2
Linear relationship

E(Y|X) .
. . .
.. . . .
.. .. . .
.. .. .
.. .
x1 x3 x4 x6
X

3
Specification of the model (cntd)
Econometric (Regression) model

Y = b1 + b2X + u

Where Y = sleep - the dependent variable


X = totwork - explanatory variable
u = Disturbance (random error) term
b1 & b2 = parameters
4
Outliers are values of a variable which lie
way above or below average of the variable

Before conducting any regression analysis,


always check your data for outlier(s)
Outlier(s)
That’s why plotting a
Example : data from IFLS
scatterplot is always
2007
important

Source: Ekki Syamsulhakim


RENT
MODEL
𝑟𝑒𝑛𝑡!
= 𝛽" + 𝛽# 𝑟 𝑜 𝑜 𝑚 ! + 𝛽$ 𝑠 𝑞 𝑟 𝑚 + 𝑢 !

Source: Ekki Syamsulhakim


Source: Ekki Syamsulhakim
Data / estimation of parameters
• Obtaining the data
• observed values of Y and X

• Estimation of the parameters


• Y and X are the variables (“known”)

• b1, b2 and u are the parameters (“unknown”)

8
Diagnostic analysis
• Is the model correctly specified?

• Have all assumptions been met?

• Are there any unusual observations or


outliers that may unduly influence results?

9
The practice of regression modelling
Hypothesis / theory

Model specification

Data
Estimation

Specification testing and diagnostic testing

Yes Is the model adequate? No

Hypothesis testing

prediction and forecasting 10


Describing the overall fit of the
estimated model
Coefficient of determination, or R2, is a
measure of the ‘goodness of fit’ of a regression

i.e. the proportion of the variation


in Yi which is explained by the regression
0 < R2 < 1

But focusing solely on maximising R2 is not a good


idea!
11
EXCEL
EXERCISE

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