ECS3706 Assignment 2 Semester 2 2024 ;100 % TRUSTED workings, Expert Solved, Explanations and Solutions. For assistance call or W.h.a.t.s.a.p.p us on ...(.+.2.5.4.7.7.9.5.4.0.1.3.2)...........
1. Explain why econometricians must know and understand the classical linear regression assumptions. (4) ...
1. Why econometricians need to know the classical linear regression
assumptions
Econometricians need to be familiar with and understand the classical linear regression
assumptions because these assumptions form the backbone of how accurate and
reliable their results are. Without these assumptions, the mathematical model that
econometricians use to predict relationships between variables can give misleading
results, or worse, incorrect conclusions. The classical linear regression assumptions
ensure that the regression model works properly by ensuring the relationships between
the variables are consistent, that the model is unbiased, and that the standard errors
(which tell us how much error there is in the estimates) are correctly measured. If any of
these assumptions are violated, the results can become unreliable, leading to poor
decisions, especially in economic policymaking. So, understanding these assumptions
helps econometricians produce meaningful insights and avoid errors.
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