.

Correlation Analysis:
estimating linear relationship btw X&Y

Regression Anyalsis:
btw indep. and dep.

LSE Least Square Estimator

min(abs) -> calculatuon completed
min(sum) -> not unique solution

OLS, GLS, FGLS

two conditions needed to be OLS
FOC SOC

CLRM ass. satisfied -> OLS: BLUE
Otherwise, better estimator exists.

Specification Errors
(1) Inclusion of irrelevant v.
still unbiased but inefficient

(2) Omission of relevant v.
frequently biased

(3) Wrong fn. form

Multiple Regression

FWL