11_TwoVariables0830_handout

we need to what is 2 variance

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: -a p. 9 © CMU / Y. Kryukov Example 3: 73 2 Au- 2 61 g6 1.1 Two variable OLS - Estimate distribution p. 10 © CMU / Y. Kryukov How do we know σ 2 ? Is σ part of population, data or estimate? ......... We need to . . . . . . . . What is σ 2 ? Variance of u How do you estimate that? Do we observe u? Is it in our data? Can our estimates help us? ... p. 11 © CMU / Y. Kryukov Estimating σ 2 Did we see an estimate of variance before? ˆ Apply to U We can prove that: ∑ N ˆ Ui = i =1 The formula is 1 N ˆ σ= U i2 ∑i =1 ˆ N −2 2 Why (N – 2)? p. 12 © CMU / Y. Kryukov Estimated variance of betas Take variance formulas, Replace ac...
View Full Document

This note was uploaded on 01/21/2011 for the course ECON 73-261 taught by Professor Kyrkv during the Fall '09 term at Carnegie Mellon.

Ask a homework question - tutors are online