Lecture 5: Regression and Data

This set of flashcards focuses on key vocabulary and concepts related to regression analysis and its applications in econometrics.

Regression

A statistical method to model the relationship between a dependent variable and one or more independent variables.

Ordinary Least Squares (OLS)

A method for estimating the parameters in a regression model by minimizing the sum of the squares of the differences between observed and predicted values.

Difference-in-differences

A statistical technique used to estimate causal relationships by comparing the differences in outcomes over time between a treatment group and a control group.

Sample mean

The average of a set of sample observations, calculated as the sum of the observations divided by the number of observations.

Population vs Sample

Population refers to the entire group under study, while a sample is a subset of the population used to estimate characteristics of the whole.

Y-intercept

The value of Y when the independent variable X is zero, representing the starting point of the regression line.

Estimated slope (βˆ)

The estimated change in the dependent variable for a one-unit change in the independent variable.

Outlier

An observation that lies an abnormal distance from other values in a dataset, potentially influencing the results of the regression.

Non-linear relationships

Relationships between variables that do not follow a straight line when plotted, possibly requiring transformation or different modeling techniques.

Causal effect

The change in the outcome variable that can be attributed directly to a change in the treatment or independent variable.