slides_Ch2_W[1]

N1 yi o 1 xi 0 i 214 215 it goes without saying that

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: 2 & 2.13) in terms of the sample counterparts (or analogues) of E [u ] and E [xu ]. We can thus de…ne the MoM estimators as the solution to the system: ∑n=1 xi (yi βo β1 xi ) = 0 i . ∑n=1 yi βo β1 xi = 0 i Melissa Tartari (Yale) Econometrics (2.14 & 2.15) 27 / 93 The Method of Moments Approach VI More generally, the LLN allows us to rewrite the system (2.12 & 2.13) in terms of the sample counterparts (or analogues) of E [u ] and E [xu ]. We can thus de…ne the MoM estimators as the solution to the system: ∑n=1 xi (yi βo β1 xi ) = 0 i . ∑n=1 yi βo β1 xi = 0 i (2.14 & 2.15) It goes without saying that the estimators obtained as solutions to the ˆ MM ˆ MM obtained by system (2.14 & 2.15) are exactly the βo , β1 n o directly replacing the population objects µy , µx , var (x ) , cov (x , y ) in (4) with their sample counterparts. Melissa Tartari (Yale) Econometrics 27 / 93 The Method of Moments Approach VI More generally, the LLN allows us to rewrite the system (2.12 & 2.13) in terms of the sample counterparts (or analogues) of E [u ] and E [xu ]. We can thus de…ne the MoM estimators as the solution to the system: ∑n=1 xi (yi βo β1 xi ) = 0 i . ∑n=1 yi βo β1 xi = 0 i (2.14 & 2.15) It goes without saying that the estimators obtained as solutions to the ˆ MM ˆ MM obtained by system (2.14 & 2.15) are exactly the βo , β1 n o directly replacing the population objects µy , µx , var (x ) , cov (x , y ) in (4) with their sample counterparts. ˆ MM ˆ MM ... Recall, β , β o Melissa Tartari (Yale) 1 Econometrics 27 / 93 The Method of Moments Approach VI More generally, the LLN allows us to rewrite the system (2.12 & 2.13) in terms of the sample counterparts (or analogues) of E [u ] and E [xu ]. We can thus de…ne the MoM estimators as the solution to the system: ∑n=1 xi (yi βo β1 xi ) = 0 i . ∑n=1 yi βo β1 xi = 0 i (2.14 & 2.15) It goes without saying that the estimators obtained as solutions to the ˆ MM ˆ MM obtained by system (2.14 & 2.15) are exactly the βo , β1 n o direc...
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