Generalized Least Squares (GLS)

Generalized Least Squares (GLS) is an advanced statistical method used to estimate relationships between variables when traditional methods like Ordinary Least Squares (OLS) don't work well due to issues in the data. Specifically, GLS accounts for situations where the variability of errors differs across observations or when errors are correlated. By adjusting for these problems, GLS provides more accurate and reliable estimates of the relationships, leading to better insights and predictions. It’s widely used in economic, financial, and social sciences for analyzing complex data structures.