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  • 5.5 The Method of Ordinary Least Square

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    Mohiuddin Gaalib
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    The method of ordinary least squares provides a summary of the key principles. It states that the estimated regression function is obtained to minimize the sum of the squared residuals, with the estimate passing through the sample means of the dependent and independent variables. The mean of the residuals is equal to zero and the sum of the products of the residuals and independent variables is also equal to zero, meaning these variables are uncorrelated.

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    5.5 the Method of Ordinary Least Square

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    The method of ordinary least squares provides a summary of the key principles. It states that the estimated regression function is obtained to minimize the sum of the squared residuals, with the estimate passing through the sample means of the dependent and independent variables. The mean of the residuals is equal to zero and the sum of the products of the residuals and independent variables is also equal to zero, meaning these variables are uncorrelated.

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    18 views1 page

    5.5 The Method of Ordinary Least Square

    Uploaded by

    Mohiuddin Gaalib
    The method of ordinary least squares provides a summary of the key principles. It states that the estimated regression function is obtained to minimize the sum of the squared residuals, with the estimate passing through the sample means of the dependent and independent variables. The mean of the residuals is equal to zero and the sum of the products of the residuals and independent variables is also equal to zero, meaning these variables are uncorrelated.

    Copyright:

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    Download as DOC, PDF, TXT or read online from Scribd
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    The method of ordinary least square : it is a method of obtaining the SRF as an estimator of the true PRF.

    The least square principle states that the SRF should be fixed in such way that the sum of the residual square is the smallest one. The features of OLS The SRF obtained by the method of O S always passes through the sample mean !alues of " and #. $ % & ei ' n. mean !alue of the residuals is always equal to (ero the sum of the product of the residuals e and the explanatory !ariable " is (ero. These two !ariables are uncorrelated.

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