3.1. Given the assumptions in column 1 of the table, show that the assumptions in column 2 are equivalent to them. Assumptions of the Classical Model (1) (2) E(Y, | X) = B2 + B2X cov (Y, Y) = 0 i i var (Y; | X) = o? E(u| X) = 0 cov (u, u) = 0 i#i var (u|X) = o?

3.1. Given the assumptions in column 1 of the table, show that the assumptions in column 2 are equivalent to them. Assumptions of the Classical Model (1) (2) E(Y, | X) = B2 + B2X cov (Y, Y) = 0 i i var (Y; | X) = o? E(u| X) = 0 cov (u, u) = 0 i#i var (u|X) = o?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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SUBJECT ECONMETRICS

3.1. Given the assumptions in column 1 of the table, show that the assumptions in column
2 are equivalent to them.
Assumptions of the Classical Model
(1)
(2)
E(u| X) = 0
E(Y; | X) = B2 + B2X
cov (ui, u) = 0 i±j
var (u|X) = o?
cov (Y, Y) = 0 i ti
var (Y; | X) = o²
%3D

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