slides_Ch5_W[1]

This result does not surprise us since under lr1

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: do …le we con…rm this graphicaly. ˆ Observe that the histogram for β1 is centered about 1 (as it should by unbiasedness) and has a bell-shaped symmetrical form, also 95% of the probability mass is within 2 standard deviations of the mean: all of these are typical features of a normal distribution (the red line represents the best …tting N and helps us make comparisons). This result does not surprise us since under LR.1 through LR.6 the OLS estimator has an exact normal distribution and the histogram is an estimate of that distribution. Melissa Tartari (Yale) Econometrics 24 / 27 Part I: Normal Disturbances II Observe that the relationship between y and x is U-shaped while the relationship between y and x 2 is linear: in the do …le we con…rm this graphicaly. ˆ Observe that the histogram for β1 is centered about 1 (as it should by unbiasedness) and has a bell-shaped symmetrical form, also 95% of the probability mass is within 2 standard deviations of the mean: all of these are typical features of a normal distribution (the red line represent...
View Full Document

This note was uploaded on 02/13/2014 for the course ECON 350 taught by Professor Donaldbrown during the Fall '10 term at Yale.

Ask a homework question - tutors are online