Violating the assumptions of the classical linear regression model

TL;DRAbstract

We have thus far been developing the methodology of classical linear regression (CLR) using the ordinary least squares (OLS) system of estimation. This is a very powerful technique for uncovering the relationships among variables. Yet it has its limitations. It is clearly important to understand what these limitations are, to see how they affect the outcomes of the regression, and to suggest some procedures both to identify and to correct for these effects. That is the purpose of this chapter.

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