I'm writing my dissertation right now and in it I've used a regression model. With one independent variable and 4 dummy variables.
Y = b_0 + b_1STAR1 + b_2STAR2 + b_3STAR3 + b_3STAR4 + b_3 STAR5 + e
Were the beta parameters are OLS estimators and STARi are the dummy variables i.e( value 0 or 1).
Now i know what the 5 assumptions behind OLS. Although how do i prove that they are fulfilled?
- Linear in parameters
How do i prove my beta parameters are linear?
- Random Sampling
I understand how i can argue this assumption.
- Zero Conditional mean
Can this be proven by a scatter plot?
- Sample Variation
Whats the difference between Sample variation and Random Sampling?
- Homoscedasticity
If I've done a regression in Excel can i just take the variance of all the residuals to see if its a constant?