A full course in econometrics - undergraduate level - part 1 - R squared part 2

This video provides a description of some of the problems associated with using R squared to select between models in econometrics. The Matlab code for the above simulation is shown below. clear; close all; clc; Y = rand([100 1]); Y_var=sum(Y); r=zeros(90,1); X=randn([100,1]); r_ad=zeros(90,1); for i=10:100 XX=randn([100 1]); X=[X XX]; beta_hat= (inv(X'*X))*X'*Y; Y_hat=X*beta_hat; r(i-9)=(1/Y_var)*sum(Y-Y_hat); r_ad(i-9)=(1-r(i-9))-(r(i-9))*(i/(100-i)); plot(1-r,'b') pause(0.1) end Check out https://ben-lambert.com/econometrics-course-problem-sets-and-data/ for course materials, and information regarding updates on each of the courses. Quite excitingly (for me at least), I am about to publish a whole series of new videos on Bayesian statistics on youtube. See here for information: https://ben-lambert.com/bayesian/ Accompanying this series, there will be a book: https://www.amazon.co.uk/gp/product/1473916364/ref=pe_3140701_247401851_em_1p_0_ti