Transcription of Linear Regression using Stata - Princeton University
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Linear Regression using Stata ( ) Oscar Torres-Reyna December 2007 PU/DSS/OTRR egression: a practical approach (overview)We use Regression to estimate the unknown effectof changing one variable over another (Stock and Watson, 2003, ch. 4)When running a Regression we are making two assumptions, 1) there is a Linear relationship between two variables ( Xand Y) and 2) this relationship is additive ( Y= x1 + x2 + ..+xN). Technically, Linear Regression estimates how much Ychanges when Xchanges one unit.
between X and Y. R-square shows the amount of variance of Y explained by X. In this case expenseexplains 22% of the variance in SAT scores. Lets run the regression: regress . csat expense, robust. Adj R. 2 (not shown here) shows the same as . R. 2. but adjusted by the # of cases and # of variables. When the # of variables is small and the # of ...
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