If an additional independent variable, however irrelevant, is added to a multiple regression model, a smaller sum-of-squared errors will result. Explain why this is so, and discuss the consequences for the interpretation of the coefficient of determination.
Answer to relevant QuestionsA dependent variable is regressed on two independent variables. It is possible that the hypotheses H0: β1 = 0 and H0: β2 = 0 cannot be rejected at low significance levels, yet the hypothesis H0: β1 = β2 = 0 can be ...A consulting group offers courses in financial management for executives. At the end of these courses, participants are asked to provide overall ratings of the value of the course. To assess the impact of various factors on ...The following regression model was fitted to data on 60 U.S. female amateur golfers: where y` = winnings per tournament in dollars x1 = average length of drive in yards x2 = percentage times drive ends in fairway x3 = ...The data file Pension Funds contains data on the market return (X) of stocks and the percentage (Y) of portfolios in common stocks at market value at the end of the year for private pension funds. Estimate the model yt = β0 ...An economist estimates the following regression model: y = β0 + β1x1 + β2x2 + ε The estimates of the parameters β1 and β2 are not very large compared with their respective standard errors. But the size of the ...
Post your question