Suppose you run the following regression: Y i = 1 + 2 x i +u
Question:
Suppose you run the following regression:
Yi = β̂1 + β̂2xi +ûi
where, as usual, yi and xi are deviations from their respective mean values.
What will be the value of β̂1? Why? Will β̂2 be the same as that obtained from Eq. (3.1.6)? Why?
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Since x i y i 0 that is the sum of the deviations from mean value ...View the full answer
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