Bias and Variance of Slope and Intercept

1
Bias and Variance of Slope and Intercept

• Slope
• Intercept

2
Variance Formulae

• Error sum of squares
• Can show that
• Therefore is unbiased

3
Variance Formulae

• Another formula for
• where

4
Estimated Standard Errors (definitions)

• Slope
• Intercept

5
Use of Regression

• Care should be taken in
• selecting variables (strong observed correlation
  does not always imply a causal relationship)
• extrapolating beyond the original range of the
  regressor x