From the course: Data, Economic Modeling, and Forecasting with Stata

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Key output validity measures

Key output validity measures - Stata Tutorial

From the course: Data, Economic Modeling, and Forecasting with Stata

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Key output validity measures

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- [Jason] Now because we saw a statistical relationship and strong correlation between that three-month ahead aluminum price and the Chinese manufacturing PMI, let's do a linear regression model, the command for which is R-E-G. That's just regression, that's it. And then let's put in those same things that are correlated. Let's look at that aluminum closing price, three months in and the Chinese PMI. This is what we call a univariate regression because there's one input to it. The only independent variable is the Chinese PMI. And that output, there's of course only one output in a regression, is the aluminum price. What we see here is some statistical significance as well. There are a few different points of validity that you want to look at with a univariate regression. One is the P statistic. This is related to the T statistic. This here, you want these to be at zero. For the probability about the F statistic, you…

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