EconometricanalysisTheParadigmofEconometrics幻灯片.pptVIP

* * * * * * * * * * * * * * * * * * * * * * * * * Sample Data (Experiment) 50 Observations on P and QShowing Variation of P Around E[P] Variation Around E[P|Q](Conditioning Reduces Variation) Means of P for Given Group Means of Q Another Conditioning Variable E[P|Q,Y=1] E[P|Q,Y=0] Conditional Mean Functions No requirement that they be linear (we will discuss what we mean by linear) No restrictions on conditional variances Projections and Regressions We explore the difference between the linear projection and the conditional mean function y = ? + ?x + ? where ? ? x, E(?|x) = 0