Topic 2 - SLRM estimation

population parameter meaning and what is the sign

a fixed unknown value that describes the characteristics of the population, β₁ β₂

true value youre trying to estimate

estimator meaning and sign

the general formula that estimates the population parameter based on a sample, β hat 1 and β hat 2

estimate meaning and sign

calculated value for the population parameter from a specific sample, b1 and b2

residual meaning

difference between observed and predicted values of the fitted model

error term meaning

represents the unobserved factors in the true population model that affect the dependant variable

sample regression function meaning

estimated relationship between the dependant and independant variables, based on a a sample

population regression function meaning

the true relationship of dependant and independant based on the entire population

actual value and the sign

real observed values from the data set - yi

predicted values

values that the regression predicts for each data point based on the estimated coefficient - yi hat

expected value

mean/average of y - ybar

what is the least square estimator for b1/b2?

the formula to calculate them