July 22, 2020

Linear regression is an econometric method of empirical research used in many sciences to estimate statistical causality between multiple factors, assuming all other conditions remain constant. In economics, it helps in testing theoretical models against reality. Single and multi-regression models are typically used for assessing varying scales of variable influences. However, limitations due to the ‘ceteris paribus’ clause lead to the introduction of multi-regression techniques, extending the analysis to other potential causative factors.