Using Econometrics： A Practical Guide (4th Edition) 2008.doc

Using Econometrics： A Practical Guide (4th Edition) 2008 PART THE BASIC REGRESSION MODEL 1 CHAPTER An Overview of Regression Analysis 1.1 What Is Econometrics? 1.2 What Is Regression Analysis? 1.3 The Estimated Regression Equation 1.4 A Simple Example of Regression Analysis 1.5 Using Regression to Explain Housing Prices 1.6 Summary and Exercises 1.1 What Is Econometrics? ;Econometrics is too mathematical; it#039;s the reason my best friend isn#039;t majoring in economics.; ;There are two things you don#039;t want to see in the making—sausage and econometric research. ;1 ;Econometrics may be defined as the quantitative analysis of actual eco- nomic phenomena. ; 2 ;It#039;s my experience that #039;economy-tricks#039; is usually nothing more than a justification of what the author believed before the research was begun.; Obviously, econometrics means different things to different people. To begin- ning students, it may seem as if econometrics is an overly complex obstacle to an otherwise useful education. To skeptical observers, econometric results should be trusted only when the steps that produced those results are com- pletely known. To professionals in the field, econometrics is a fascinating set 1. Attributed to Edward E. Learner. 2, Paul A. Samuelson, T. C. Koopmans, and J. R. Stone, ;Repo rt of the Evaluative Committee for Econometrica,; Econometrica, 1954, p. 141. 3 4 PART I ?? THE BASIC REGRESSION MODEL of techniques that allows the measurement and analysis of economic phe- nomena and the prediction of future economic trends. You#039;re probably thinking that such diverse points of 6#00aa00view sound like the statements of blind people trying to describe an elephant based on what they happen to be touching, and you#039;re partially right. Econometrics has both a formal definition and a larger context. Although you can easily memorize the formal definition, you#039;ll get the complete picture onl