Review of Multivariate OLS Regression: Topics, Data Analysis, Exam Details, Slides of Quantitative Techniques

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OLS Review

Review of Multivariate OLS

– Topics

– Data Analysis

– Questions

Exam Particulars

Review of Multivariate OLS

• Matrix algebra

• E.g., transpose, identity, addition & multiplication
• Regression in Matrix Notation
• Understanding the Matrix Calculation
• When X matrix has no unique X -

• Partial Effects

• Calculating partial effects; interpretation

• Variable selection and model building

• Risks in model building

Summary of Assumption Failures

and their Implications

Problem Biased b Biased SE Invalid t/F Hi Var Non-linear Yes Yes Yes --- Omit relev. X Yes Yes Yes --- Irrel X No No No Yes X meas. Error Yes Yes Yes --- Heterosced. No Yes Yes Yes Autocorr. No Yes Yes Yes X corr. error Yes Yes Yes --- Non-normal err. No No Yes Yes Multicollinearity No No No Yes

Testing for OLS Failures

• Can’t check some assumptions
  • which ones?
• Can check for:
  • Linearity
  • Whether an X should be included
  • Homoscedasticity
  • Autocorrelation
  • Non-normality
• Method
  • Univariate and bivariate analyses
  • Plots
  • Tolerances
  • Influence analyses

Coming Up...

• Chapter 7: Logit Regression Analysis