The Specification of Error Terms

Jan Tinbergen

Chapter 13 in Nonlinear and Multisectoral Macrodynamics, 1990, pp 201-206 from Palgrave Macmillan

Abstract: Abstract It is customary to introduce into a relationship we are going to test with the aid of regression analysis, added to the systematic terms, an error term. The systematic terms are those containing one or more independent variables; in a relation used to explain national income as a dependent variable we may use as an important independent variable exports. This will especially apply to small open countries. The error term is introduced as a catchall for less important independent variables and for measuring errors of both the dependent variable and the independent variables. The error term is usually assumed to be a random variable with an average value of zero and a normal distribution.

Keywords: Error Term; National Income; Educational Grouping; Labor Relation Review; Horticultural Product (search for similar items in EconPapers)
Date: 1990
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DOI: 10.1007/978-1-349-10612-7_13

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