Gauss Markov

What is a correlation coefficient?

The correlation coefficient is used in economics and throughout econometrics to measure the strength of a relationship between two given variables. This econometric measure also gives an indication of whether the two variables are positively related or negatively related to each other. The correlation coefficient is measured between -1 to +1. For example if we …

What is a correlation coefficient? Read More »

Econometrics: What is the Gauss Markov Theorem?

According to the Gauss Markov Theorem, if the first six classical assumptions are met within your model, then the estimates produced by Ordinary Least Squares will be BLUE. This means that Ordinary Least Squares will produce the Best Linear Unbiased Estimates available. Hence, BLUE. Check out our blogs on the classical assumptions¬†here. So what exactly …

Econometrics: What is the Gauss Markov Theorem? Read More »

0