Econometric Theory/Terminology and Notation

Terminology and Notation Above we discussed dependent variables and explanatory variables. There are many synonyms of various terms and these are no exception. The dependent variable can also be called: Explained variable Predictand Regressand Response Endogenous Outcome Controlled variable and the explanatory variable: Independent variable Predictor Regressor Stimulus Exogenous Covariate Control variable If we have one explanatory variable. We get what is called two-variable (simple) regression analysis. If we include more than one explanatory variable, it is called multiple regression analysis. The error term is assumed to be random or stochastic variable. It implies that it can take any value within a given probability distribution and there are no other factors determining it. If other influences were known, it would no longer be random. Bibliography Gujarati D.N. 2003 Basic Econometrics, International Edition - 4th ed McGraw-Hill Higher Education 0-07-112342-3 24–25