(a) Why does OLS estimation involve taking vertical deviations of the points to the line rather than...

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(a) Why does OLS estimation involve taking vertical deviations of the points to the line rather than horizontal distances?

(b) Why are the vertical distances squared before being added together?

(c) Why are the squares of the vertical distances taken rather than the absolute values?

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Introductory Econometrics For Finance

ISBN: 9781108436823

4th Edition

Authors: Chris Brooks

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Question Posted: Jul 24, 2024 10:05 AM

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(a) Why does OLS estimation involve taking vertical deviations of the points to the line rather than...

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Introductory Econometrics For Finance

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