Creating a comprehensive econometrics cheat sheet involves balancing with economic interpretation . Use this guide to structure your sheet for quick reference during exams. 1. Essential Formulas Simple Linear Regression (OLS) : (Intercept) Coefficient of Determination ( R2cap R squared ) : (Measures goodness-of-fit). Variance & Covariance : 2. The Gauss-Markov Assumptions
β̂1=∑(xi−x̄)(yi−ȳ)∑(xi−x̄)2=Cov(x,y)Var(x)beta hat sub 1 equals the fraction with numerator sum of open paren x sub i minus x bar close paren open paren y sub i minus y bar close paren and denominator sum of open paren x sub i minus x bar close paren squared end-fraction equals the fraction with numerator cap C o v open paren x comma y close paren and denominator cap V a r open paren x close paren end-fraction Interpretation Cheat Sheet: Level-Level: . A 1-unit increase in leads to a β1beta sub 1 unit change in Log-Level: . A 1-unit increase in leads to a Level-Log: increase in leads to a unit change in Log-Log (Elasticity): increase in leads to a 2. Assessing Model Quality econometrics exam cheat sheet
: Check VIF (Variance Inflation Factor). If VIF > 10, variables are highly correlated. 5. Advanced Topics (Optional based on course) Log-Log Models : . Interpretation: β1beta sub 1 is the elasticity (% change in for 1% change in A 1-unit increase in leads to a β1beta