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Introductory Econometrics 4th Edition by Jeffrey Wooldridge
Edition 4ISBN: 978-0324660609Introductory Econometrics 4th Edition by Jeffrey Wooldridge
Edition 4ISBN: 978-0324660609 Exercise 3
Let Y 1 , Y 2 , Y 3 , and Y 4 be independent, identically distributed random variables from a population with mean and variance 2. Let 
= 
(Y 1 +Y 2 + Y 3 + Y 4 ) denote the average of these four random variables.
(i) What are the expected value and variance of
P in terms of and 2
(ii) Now, consider a different estimator of :
W =
Y 1 + 
Y 2 + 
Y 3 + 
Y 4.
This is an example of a weighted average of the Yi. Show that W is also an unbiased estimator of . Find the variance of W.
(iii) Based on your answers to parts (i) and (ii), which estimator of do you prefer,
or W
= (Y 1 +Y 2 + Y 3 + Y 4 ) denote the average of these four random variables.(i) What are the expected value and variance of
P in terms of and 2 (ii) Now, consider a different estimator of :
W =
Y 1 + Y 2 + Y 3 + Y 4.This is an example of a weighted average of the Yi. Show that W is also an unbiased estimator of . Find the variance of W.
(iii) Based on your answers to parts (i) and (ii), which estimator of do you prefer,
or WExplanation
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The following variables are random and i...
Introductory Econometrics 4th Edition by Jeffrey Wooldridge
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