Varying-Coefficient Model And Its Application On The Price Analysis Of Housing

Coefficient of regressor is constant in classic linear models.that is to say the effect of independent variable on dependent varible is fixed.However,the assumption may not hold in practical problems,it can not meet the actual needs,so varying-coefficient model is devised. As the name suggests coefficient of regressor changes in varying-coefficient model, so it is very difficult to estimate the coefficient compared with traditional approach on linear model,but application of varying-coefficient is perfect. This paper mainly sumarizes related types of varying-coefficient model,all kinds of approach on the estimation of coefficient and testing problems in varying-coefficient model,lastly,it reveals relationship between price of housing and the number of population-. average salary, its residuals are less than that of ordinary,it is further found that the coefficients of regressors indeed change.