State the ordinary least squares (OLS) estimation criterion. State the OLS normal equations. Derive the...

State the ordinary least squares (OLS) estimation criterion. State the OLS normal equations.

Derive the OLS normal equations from the OLS estimation criterion.

Perform a test of the null hypothesis H₀:β2 = 0 against the alternative hypothesis H₁:β2 ≠ 0 at the 1% significance level ( i.e. for significance level α = 0.01 ). Show how you calculated the test statistic. State the decision rule you use, and the inference you would draw from the test. Briefly explain what the test outcome means.

Expert Solution

Rahul Sunny answered 2 years ago

The following equations have been estimated by Ordinary Least Squares (OLS), where Y denotes annual earnings,...

The following equations have been estimated by Ordinary Least Squares (OLS), where Y denotes annual earnings, P job evaluation points, and the subscripts m and f denote male and female respectively: Ym = 5000 + 100Pm Yf = 4000 + 80Pf Assume the average job evaluation score was 300 points in male-dominated jobs and 200 points in female-dominated jobs. What is the average pay in male-dominated jobs and in female-dominated jobs? Use a Oaxaca decomposition to determine the average pay...

Derive the ordinary least squares estimator in case of multiple regression analysis

. Under the Gauss-Markov assumptions, we know that the Ordinary Least Squares (OLS) estimator βˆ is...

. Under the Gauss-Markov assumptions, we know that the Ordinary Least Squares (OLS) estimator βˆ is unbiased, efficient, and consistent. However, if the assumption that E[ϵ 2 i |X] = σ 2 i = σ 2 is violated while the assumption of E[ϵi , ϵj ] = 0 , ∀i ̸= j holds, that the least squares estimator is unbiased but is no longer efficient. The Generalized Least Squares (GLS) estimator, in this case, may be unbiased, consistent, and efficient...

A researcher obtained the ordinary least squares (OLS) estimates for a Ghanaian firm's stock price using...

A researcher obtained the ordinary least squares (OLS) estimates for a Ghanaian firm's stock price using 120 observations from 1980 ml to 1989 m 12 (All variables in logarithms) as: In St = 0.87 -054 In pt + 0.65 In yt + 0.34 In rt - 0.32 In mt Standard errors: pt = (1.06) yt = (0.24) rt = (0.12) mt = (0.24) Adjusted R2=0.34, RSS = 1.24, F1154 =3.75 St are the log of the stock price, pt is...

Describe the two assumptions used in class to derive the ordinary least squares estimates of the...

Describe the two assumptions used in class to derive the ordinary least squares estimates of the intercept and slope. Why are these assumptions important and what do they mean? Which assumption is needed to estimate each parameter?

Use the normal equations to directly apply the least squares method (that is, do not use...

Use the normal equations to directly apply the least squares method (that is, do not use a transformation or Excel’s built in trendline function) to the given data for the indicated model. Compute D and dmax as bounds for cmax; what do these bounds suggest about improving the fit by using the Chebyshev criterion? x 1 2 3 4 5 y 1 1 2 2 4 a. y = ax + b b. y = ax2 Analyze the deviations for...

what is the regression technique of ordinary least squares?

Q3). Explain the term BLUE in ordinary least square (OLS) analysis.

Derive the state-space equations of a Cuk converter

Which of the following are feasible equations of a least squares regression line for the annual...

Which of the following are feasible equations of a least squares regression line for the annual population change of a small country from the year 2000 to the year 2015? Select all that apply. Select all that apply: yˆ=38,000+2500x yˆ=38,000−3500x yˆ=−38,000+2500x yˆ=38,000−1500x

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