Answer to Question #228778 in Microeconomics for Adekunle

Question

1) Describe the steps involved in running an OLS regression from the initial point of

deciding the theoretical model to stating the conclusions on the results.

Answer 1

Linear regression analysis entails more than simply fitting a linear line through a cloud of data points. There are three steps to it:

(1) Looking for correlation and directionality in the data.

(2) Fitting the line to the model, or estimating the model.

(3) Assessing the model's usefulness and validity.