Answer to Question #320286 in Economics of Enterprise for Abdiqani

Question

Explain clearly the function of and the difference between the following terms:

a. Estimates and estimators

b. R2 and Adjusted R2

Answer 1

Estimates are values that summarize an observed sample. An estimate is therefore a numerical value pf the estimator when it is calculated using data from a specific sample. An estimator is a rule for computing an estimate of a parameter from a sample. It is therefore a function of the sample.

$R^{2}$ measures the proportion of the variation in the dependent variable Y explained by the dependent variable X for a linear regression model. Adjusted $R^{2}$ is a new version of the R squared that adjust the variable predictors in regression models.