Consider a simple linear regression model with nonstochastic regressor: Yi = β1 + β2Xi + ui...

Consider a simple linear regression model with nonstochastic regressor: Yi = β1 + β2Xi + ui . 1. [3 points] What are the assumptions of this model so that the OLS estimators are BLUE (best linear unbiased estimates)? 2. [4 points] Let βˆ 1 and βˆ 2 be the OLS estimators of β1 and β2. Derive βˆ 1 and βˆ 2. 3. [2 points] Show that βˆ 2 is an unbiased estimator of β2.

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milcah answered 8 months ago

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