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Friday, February 24, 2006

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Comments

Barton Paul Levenson

How do you get the coefficients and intercept for the new relation in terms of the old variables?

Let me explain. Suppose you have a simple linear regression between Y and X:

Y = b0 + b1 X

You then calculate rho^ for the residuals, transform the variables, regress, find rho^ again, etc., until you have:

Y* = b*0 + b1* X*

How do you find b0 and b1 valuables so that the equation can be expressed in terms of the original Y and X?

Barton Paul Levenson

"Values," not "valuables." It's early. I'm not really awake yet.

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Economics 421