The measure of standard error can also be applied to the

Last updated: 1/19/2024

The measure of standard error can also be applied to the parameter estimates resulting from linear regressions For example consider the following linear regression equation that describes the relationship between education and wage WAGE Bo B EDUC where WAGE is the hourly wage of person i i e any specific person and EDUC is the number of years of education for that same person The residual e encompasses other factors that influence wage and is assumed to be uncorrelated with education and have a mean of zero Suppose that after collecting a cross sectional data set you run an OLS regression to obt Following parameter estimates WAGE 10 1 6 2 EDUC 4 86 3 52 4 19 5 53 If the standard error of the estimate of 1 is 1 34 then the true value of lies between and grows you would expect this range to in size As the number of observations in a data set