Abstract
Consider the following regression equation
where
with n denoting the number of observations and k the number of variables in the regression, with n > k. In this case, y is a column vector of dimension (n×1) and X is a matrix of dimension (n × k). Each column of X denotes a variable and each row of X denotes an observation on these variables. If y is log(wage) as in the empirical example in Chapter 4, see Table 4.1 then the columns of X contain a column of ones for the constant (usually the first column), weeks worked, years of full time experience, years of education, sex, race, marital status, etc.
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Notes
- 1.
For additional readings consult the econometrics books cited in the Preface. Also the chapter on heteroskedasticity by Griffiths (2001), and the chapter on serial correlation by King (2001):
References
Footnote
For additional readings consult the econometrics books cited in the Preface. Also the chapter on heteroskedasticity by Griffiths (2001), and the chapter on serial correlation by King (2001):
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Baltagi, B.H. (2011). The General Linear Model: The Basics. In: Econometrics. Springer Texts in Business and Economics. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-20059-5_7
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