Unit III Regression
Unit III Regression
• Regression
• The Gauss-Markov theorem is based on five assumptions,
or conditions, that must be met for the Ordinary Least
Squares (OLS) estimate to be the best linear unbiased
estimate (BLUE):
• Linearity: The parameters being estimated must be
BLUE linear.
Forecasting the
Predicting a stock amount of
market index using precipitation in a
other economic region based on
indicators characteristics of the
jet stream
MLE is a method used in estimating the parameters of a statistical model, and for fitting a statistical
model to data.
If you want to find the height measurement of every basketball player in a specific location, you can
use the maximum likelihood estimation.
Normally, you would encounter problems such as cost and time constraints.
If you could not afford to measure all of the basketball players’ heights, the maximum likelihood
estimation would be very handy.
Using the maximum likelihood estimation, you can estimate the mean and variance of the height of your
subjects.
• The MLE would set the mean and variance as parameters in determining the specific parametric values
in a given model.
Multinomial Logistic Regression
For j = 1,2,···, (k - 1). The model parameters are estimated by the method of maximum likelihood. Statistical
software is available to do this fitting.