Econometrics: Classical Assumption 7 – The error term is normally distributed.

According to the Gauss Markov Theorem, an Ordinary Least Squares (OLS) model can be considered as the Best Linear Unbiased Estimator (BLUE) as long as the first six classical assumptions are met. However, if you are conducting an econometric analysis and wish to make statistical inferences about the data, such as performing statistical hypothesis testing …

Econometrics: Classical Assumption 7 – The error term is normally distributed. Read More »