Solved

(Requires Appendix Material)Your Textbook Shows That OLS Is a Linear β^\hat { \beta }

Question 20

Essay

(Requires Appendix material)Your textbook shows that OLS is a linear estimator β^\hat { \beta } 1 = i=1na^iYi\sum _ { i = 1 } ^ { n } \hat { a } _ { i } Y _ { i } , where a^i=XˉiXˉi=1n(XiXˉ)2\hat { a } _ { i } = \frac { \bar { X } _ { i } - \bar { X } } { \sum _ { i = 1 } ^ { n } \left( X _ { i } - \bar { X } \right) ^ { 2 } } For OLS to be conditionally unbiased, the following two conditions must hold: i=1na^i=0\sum _ { i = 1 } ^ { n } \hat { a } _ { i } = 0 and i=1na^iXˉi\sum _ { i = 1 } ^ { n } \hat { a } _ { i } \bar{X} _ { i } = 1. Show that this is the case.

Correct Answer:

verifed

Verified

blured image since deviations from the mea...

View Answer

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions