(2) Consider the following univariate regression model: Y₁ = B₁ + B₁ D₁ + Uj, where D₁ = 1 or 0. Then show that the least squares estimator of ß₁ takes the follow- ing form: Σ²₁Y;D; n Σ₁₁ Di Σ²₁Y;(1 – D;) Σ(1-D;)

College Algebra
10th Edition
ISBN:9781337282291
Author:Ron Larson
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Chapter3: Polynomial Functions
Section: Chapter Questions
Problem 18T
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(2) Consider the following univariate regression model:
Y; = Bo+ B1D; + U;,
where D; = 1 or 0. Then show that the least squares estimator of ß, takes the follow-
ing form:
E, Y;(1– D;)
(1– D;) *
i=1
vi=1
Zi=1
Transcribed Image Text:(2) Consider the following univariate regression model: Y; = Bo+ B1D; + U;, where D; = 1 or 0. Then show that the least squares estimator of ß, takes the follow- ing form: E, Y;(1– D;) (1– D;) * i=1 vi=1 Zi=1
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