# Econometric Theory/Terminology and Notation

## Terminology and Notation[edit]

Above we discussed dependent variables and explanatory variables. There are many synonyms of various terms and these are no exception. The dependent variable can also be called:

- Explained variable
- Predictand
- Regressand
- Response
- Endogenous
- Outcome
- Controlled variable

and the explanatory variable:

- Independent variable
- Predictor
- Regressor
- Stimulus
- Exogenous
- Covariate
- Control variable

If we have one explanatory variable. We get what is called **two-variable (simple) regression analysis**. If we include more than one explanatory variable, it is called **multiple regression analysis**.

The **error term** is assumed to be **random** or **stochastic variable**. It implies that it can take any value within a given probability distribution and there are no other factors determining it. If other influences were known, it would no longer be random.

## Bibliography[edit]

- Gujarati, D.N. (2003).
*Basic Econometrics, International Edition - 4th ed*. McGraw-Hill Higher Education. pp. 24–25. ISBN 0-07-112342-3.