Ordinary Least Squares (OLS): Intuition

Ordinary Least Squares (OLS): Intuition#

Learning objectives#

After working through this topic, you should be able to:

  • explain that we can decompose \(Y\) into a systematic part and a residual part

  • explain that the OLS estimator minimizes the sum of squared deviations from the regression line and the data points

  • list some properties of the OLS estimator

Materials#

Video with English subtitles:

Download the slides.

Video with German subtitles:

(turn subtitles on in the bottom right corner of the video)

Contents