Let be the estimated average value of the dependent variable given the particular values for the explanatory variables , , t = 1, …, k; and let be the estimated expected value of a specific unit given the same particular values for the explanatory variables , t = 1, …, k.
Then, the standard error for is greater than the standard error for

Question

Let  be the estimated average value of the dependent variable given the particular values for the explanatory variables ,  , t = 1, …, k; and let  be the estimated expected value of a specific unit given the same particular values for the explanatory variables  , t = 1, …, k.
Then, the standard error for  is greater than the standard error for

Quizplus · Accepted Answer

The standard error for an estimated expected value of a specific unit is typically lower than the standard error for the estimated average value of the dependent variable, since the former only has to account for the variability within a single unit whereas the latter must account for variability across all units.

Let Be the Estimated Average Value of the Dependent