Suppose we have a regular multiple regression situation: y - XB +e where e N(0, o'I), and 8 is our usual estimator of 3. Your friend comes up with what they think is a clever idea. They think they can leverage the power of the mean to come up with a more precise estimator of 8. They will randomly choose half the values, calculate 3 for these values, then calculate 3 for the other half of the data set. Their estimator of 3: Annt half t Aond half

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6. Suppose we have a regular multiple regression situation:
y = XB+e
where e- N(0, 0'I), and 8 is our usual estimator of 3.
Your friend comes up with what they think is a clever idea. They think they can leverage the
power of the mean to come up with a more precise estimator of 3. They will randomly choose
half the values, calculate ô for these values, then calculate ô for the other half of the data set.
Their estimator of B:
ā- Brint half + Bsomd half
Pirst
Does your friend's argument have merit? Why or why not?
(You don't need to get into detailed math on this one. A worded explanation is fine.)
Transcribed Image Text:6. Suppose we have a regular multiple regression situation: y = XB+e where e- N(0, 0'I), and 8 is our usual estimator of 3. Your friend comes up with what they think is a clever idea. They think they can leverage the power of the mean to come up with a more precise estimator of 3. They will randomly choose half the values, calculate ô for these values, then calculate ô for the other half of the data set. Their estimator of B: ā- Brint half + Bsomd half Pirst Does your friend's argument have merit? Why or why not? (You don't need to get into detailed math on this one. A worded explanation is fine.)
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