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Please answer true / false / uncertain to the statement and EXPLAIN THE ANSWER. Estimates of...

Please answer true / false / uncertain to the statement and EXPLAIN THE ANSWER.

Estimates of the Betas in a regrassion are random variables. Thus, we can expect two people using the same data and running the exact same regression to obtain different estimates. However, if they repeated the process many times, their averages would be the same.

Math   Statistics-And-Probability   
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Homework Answers

Answer #1

The answer is True.

This is explained by the Regression towards the mean phenomena.

The beta which is measured in units of standard deviation is a standardised regression coefficient. It is a measure stating how strongly each independent variable influences the dependent variable.

When the same data is used by two different people, due to beta estimates their estimates would turn out to be different.

But if they repeated the process many times due to regression towards the mean phenomena the more we repeat the Regression process, the more the estimates will come closer to the mean. Thus, repeating the process many times will lead to the estimates coming closer towards the mean and atlast approximately equal to the mean.

Hence, we can say , repeating the process many times will make the averages of the two people's estimates the same.

Hope I was able to answer your question.

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