SOLN_3b

x10 51595 x2 50 var12 00012 2 11

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Unformatted text preview: r space is available for other rooms (kitchen, living room, etc.). Hence the overall value of the house may indeed be lower. Þ One must be careful in interpreting β i ' s as ‘marginal contributions’ to the total when there are interdependencies among the explanatory variable. ˆ 8. (i) var(β1 ) = σ2 å i ( xi − x )2 ˆ So for β11 : ( x1 ,.., x10 ) = (0,.., 0,100,..,100) Þ x1 = 50 ˆ Þ var(β11 ) = (.00004) σ2 ˆ and for β12 : ( x1 ,.., x10 ) = (5,15,..,95) Þ x2 = 50 ˆ Þ var(β12 ) = (.00012) σ2 ˆ Þ β11 is more efficient (sa...
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This homework help was uploaded on 02/16/2014 for the course ESE 302 taught by Professor Ese302 during the Fall '08 term at UPenn.

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