Consider the following simple linear regression model: y = Bo + B₁x+u. Using a sample of n observations on r and y, you estimate the model by OLS and obtain the estimates Bo, B1, and the R-squared of the regression, R². Then you scale this sample by a factor of 100, obtain a new sample {₁/100; y₁/100} for i = 1,..., n, re-estimate the model by OLS, and denote the new coefficient estimates by Bo, B1, and the new R-squared 5₂

Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter7: Analytic Trigonometry
Section7.6: The Inverse Trigonometric Functions
Problem 91E
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c)  Give the expression of R˜^2 in terms of R^2 , and justify your answer.

b) Give the expression of Bo in terms of Bo, and justify your answer.
Transcribed Image Text:b) Give the expression of Bo in terms of Bo, and justify your answer.
Consider the following simple linear regression model:
y = Bo + B₁x + u.
Using a sample of n observations on x and y, you estimate the model by OLS and obtain
the estimates Bo, B₁, and the R-squared of the regression, R². Then you scale this sample
by a factor of 100, obtain a new sample {x;/100; y/100} for i = 1,..., n, re-estimate the
model by OLS, and denote the new coefficient estimates by Bo, B₁, and the new R-squared
of the regression by R².
Transcribed Image Text:Consider the following simple linear regression model: y = Bo + B₁x + u. Using a sample of n observations on x and y, you estimate the model by OLS and obtain the estimates Bo, B₁, and the R-squared of the regression, R². Then you scale this sample by a factor of 100, obtain a new sample {x;/100; y/100} for i = 1,..., n, re-estimate the model by OLS, and denote the new coefficient estimates by Bo, B₁, and the new R-squared of the regression by R².
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