Ordinary Least Squares (OLS) is a statistical method used to estimate the parameters in a linear regression model by minimizing the sum of the squares of the differences between the observed values and the values predicted by the model. OLS plays a crucial role in multiple linear regression, helping to interpret coefficients, understand functional forms, ensure consistency and efficiency of estimators, assess heteroskedasticity, and conduct tests like the Hausman test to evaluate model specifications.
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