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A mathematical model is a mathematical connection that describes some real-life scenario. To handle real-world problems securely and effectively, simulation modelling is required. In this article, the author investigates the stochastic regression model scenario in which the dependent and independent variables in a linear regression model follow a distribution. We assume that the dependent and independent variables both exhibit Type I Extreme Value Distribution. The estimators are then derived using the Modified Maximum Likelihood (MML) estimation method. In accordance with this, a hypothesis testing technique is developed. [ABSTRACT FROM AUTHOR]

Regression models form the core of the discipline of econometrics. One of the basic assumptions of classical linear regression model is that the values of the explanatory variables are fixed in repeated sampling. However, in most of the real life cases, particularly in economics the assumption of fixed regressors is not always tenable. Under a non-experimental or uncontrolled environment, the dependent variable is often under the influence of explanatory variables that are stochastic in nature. There is a huge literature related to stochastic regressors in various aspects. In this paper, a historical perspective on some of the works related to stochastic regressor is being tried to pen down based on literature search. [ABSTRACT FROM AUTHOR]