Linear regression is the starting point of econometric analysis. The linear regression model has a dependent variable that is a continuous variable, while the independent variables can take any form (continuous, discrete, or indicator variables). A simple linear regression model has only one independent variable, while a multiple linear regression model has two or more independent variables. The linear regression is typically estimated using OLS (ordinary least squares). Examples include studying the effect of education on income; or the effect of recession on stock returns.
Linear regression model: topics covered
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