THE NATURE OF REGRESSION ANALYSIS

As Mentioned in the Itroduction,regession is main tool of econometrics, and in this chapter we consider very brefly the nature of this tool.

HISTORICAL ORIGIN OF THE TERM REGRESSION

The term regression was introduced by Francis Galton. In A famous paper , Galton  found that , although there was a tendency for tall parents to have tall children and for short parents to have short children,the average height of children born of parents of a given height tended to mover or " regress" toward the average height in the populations as a whole.1 In other words , the height of the children of unusually tall or unusually short parents tends to move toward thr average height of the population. Gaton's law universal regression was confirmed by his friend Karl Pearson. Who collected more than a thousand records of height of members of family groups.2 He Found that the average height of sons of agruop of tall fathers was less than their father's height an average height of sons of group of short  sons alike toward the avarage height of all men. In the words of Galton, this was "regression to mediocrity ".

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1. Francuis Gakton, " Family Likeness In Stature. "Proceedings of Royal Sociaty, London,vol.40 1886,pp.42-72

2.K.Pearson and A.Lee."onm The Laws of Inherittance," Biometrika, vol.2 , Nov 1903. pp.357-462