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Unformatted text preview: rewrite the estimator of the slope and intercept such as Taking expectation on both side of eq. (1), we have Where the first equality comes from Assumption (1) and Assumption (4), and the second equality comes from Assumption (2) and Assumption (3). Finally, eq., (2) follows. Hence Proved; OR QNo2. (b) Given Model: Estimated Model: Here, OLS estimator of is best because in the absence of intercept ; we mean that dependent variable is more dependent on; As shows the value of in the absence of; so if will not present in the model it means that will dependent more on variable....
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This note was uploaded on 11/18/2011 for the course ECON 570 taught by Professor Staff during the Fall '08 term at UNC.
- Fall '08