ECON301_Handout_05_1213_02

# 8 c formula for 2 ˆ multiplying 5 by 1 2 1 t t t t x

• Notes
• 15

This preview shows page 5 - 9 out of 15 pages.

(8) C. Formula for 2 ˆ Multiplying ( 5  ) by 1 2 1 T t t t x x , and ( 6  ) by 2 1 1 T t t x produces 2 2 1 1 2 1 1 1 2 2 1 2 1 1 1 1 1 ˆ ˆ T T T T T t t t t t t t t t t t t t t x y x x x x x x x ( 5  ) 2 2 2 2 2 1 1 1 2 1 2 2 1 1 1 1 1 1 1 ˆ ˆ T T T T T T t t t t t t t t t t t t t t x y x x x x x x ( 6  ) Subtracting ( 5  ) from ( 6  ) yields

Subscribe to view the full document.

ECON 301 (01) - Introduction to Econometrics I April, 2012 METU - Department of Economics Instructor: Dr. Ozan ERUYGUR e-mail: Lecture Notes 6 2 2 2 2 2 1 1 1 2 2 2 1 2 1 2 1 1 1 1 1 1 1 ˆ ˆ T T T T T T T t t t t t t t t t t t t t t t t t t x y x x y x x x x x x Hence, 2 2 1 1 1 2 1 1 1 1 2 2 2 2 2 1 1 2 1 1 1 ˆ T T T T t t t t t t t t t t t T T T t t t t t t t x y x x y x x x x x x (9) 3. Interpreting the Multiple Regression Coefficients Algebraically 2 1 2 2 1 2 1 1 1 1 1 2 2 2 1 2 1 2 1 1 1 ˆ T T T T t t t t t t t t t t t T T T t t t t t t t x y x x y x x x x x x 2 1 2 1 1 1 ˆ T T t t t t t x y x 2 2 1 T t t x 2 1 2 1 1 2 2 1 2 2 1 2 1 1 T T t t t t t t T t t T T t t t t x y x x x x x 2 2 1 T t t x 2 1 2 1 2 2 1 T t t t T t t x x x
ECON 301 (01) - Introduction to Econometrics I April, 2012 METU - Department of Economics Instructor: Dr. Ozan ERUYGUR e-mail: Lecture Notes 7 1 2 1 1 2 2 1 1 2 1 1 1 2 2 1 1 1 2 2 1 1 2 1 ˆ T T T t t t t t t t T t t t t T T T t t t t t t T t t t t x x x y x y x x x x x x x Denoting 1 2 1 12 2 2 1 ˆ T t t t T t t x x c x , we have: 1 12 2 1 1 1 2 1 12 1 2 1 1 ˆ ˆ ˆ T T t t t t t t T T t t t t t x y c x y x c x x Hence, 1 12 2 1 1 2 1 12 1 2 1 1 ˆ ˆ ˆ T t t t t T T t t t t t y x c x x c x x Now consider the following regression model: 1 10 12 2 1 t t t X c c X v where 1 t v is the disturbance term. Hence we can write that:

Subscribe to view the full document.

ECON 301 (01) - Introduction to Econometrics I April, 2012 METU - Department of Economics Instructor: Dr. Ozan ERUYGUR e-mail: Lecture Notes 8 1.

{[ snackBarMessage ]}

###### "Before using Course Hero my grade was at 78%. By the end of the semester my grade was at 90%. I could not have done it without all the class material I found."
— Christopher R., University of Rhode Island '15, Course Hero Intern

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern