Please define (Gauss Markov) MLR 4, state if it is likely to hold or not in this case.
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
Please look at the following regression table. The year is 2010. The data originates from the Penn World Table 9.0, from Harris et.al. 2014 from the World Bank and from the International Energy Agency.
The variables are defined as follows:
Lntran_pc = log of transportation energy consumption per capita (ktoe)
Lnypcpenn =log of GDP per capita (USD)
Ln_gasprice = log of pump price for gasoline (USD/liter)
Ln_temperature = log of the average annual temperature (in C)
Ln_annualprecip= log of annual precipitation (mm)
Ln_land = log of the land area of a country
OECD = a dummy (indicator) that takes on the value of 1 if the country is OECD member, zero otherwise.
Please define (Gauss Markov) MLR 4, state if it is likely to hold or not in this case.
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