Please answer the following 1-5 questions. 1.Explain the OLS method that is used
ID: 1119188 • Letter: P
Question
Please answer the following 1-5 questions.
1.Explain the OLS method that is used to estimate the coefficients ( and ’s) in regression analysis. Make sure you explain the reasoning behind the method.
2. Explain what data, information and market intelligence are.
3.Discuss what a normal distribution is. List at least three characteristics that identify a normal distribution. Explain what central limit theorem tells us? Why it is important?
4.List the pros and cons of using email questionnaires for surveys.
5. Explain how to create dummy variables to include a categorical variable in regression analysis. Use the color of cars, blue, red, white and green, as an example. Make sure you mention the omitted category.
Explanation / Answer
1. The OLS or ordinary least square method estimates are the estimates obtained by minimising the sum of error terms. They have the property of BLUE. i.e. they are best linear unbiased and efficient estimates. The unbiasedness property tell us that the expected value of the estimates equal the true parameter value. From efficient we know that in the line of unbiased estimators the OLS estimates are efficient i.e. they have the least variance.