Chapter 3 Multiple Linear Regression

In the previous chapter, we discussed the simple case where the dependent variable was assumed to be explained by one regressor. However, this case rarely when it occurs in economic and is showen only for pedagogic purposes to make readers more familiar with some econometric concepts and tools. Because, In almost economic processes, the variable of interest is often influenced by more than one regressor so that they should be included in one linear model called multiple linear model , provided that the linearity assumption still retained.