This is the heart of the book. Before you run a regression, you must understand the assumptions that make it valid. An updated PPT will highlight the 7 assumptions of the CLRM:
| Topic | Gujarati Chapter | What to Include in PPT | | :--- | :--- | :--- | | | 3, 5 | Gauss-Markov theorem (BLUE) – a 1-slide summary table. | | Interpretation of Log-Log Models | 6 | Elasticity: “A 1% change in X leads to a β% change in Y.” | | Dummy Variable Trap | 9 | Why drop one category; include a simple table with k-1 dummies. | | Testing for Heteroscedasticity | 11 | Breusch-Pagan & White tests – walkthrough with a scatterplot. | | Granger Causality | 22 (Time Series) | Never interpret as true causation – only predictive causality. | basic econometrics gujarati ppt upd
Gathering relevant observations (ratio, nominal, or ordinal scale data). This is the heart of the book