The true model is Y * i = β 1 + βX * i + u i
Question:
Y*i = β1 + βX*i + ui ¦¦¦¦¦¦¦¦¦¦¦.. (1)
But because of errors of measurement you estimate
Yi = α1 + α2Xi + vi ¦¦¦¦¦¦¦¦. (2)
where Yi = Yi+ εi and Xi = Xi + wi , where εi and wi are measurement errors.
Using the data given in the following table, document the consequences of estimating model (2) instead of the true model (1).
Transcribed Image Text:
y* х* х 80.0940 -7.8655 75.4666 80.00 67.6011 0.0940 2.4666 74.9801 102.8242 75.4438 91.5721 -8.4279 100.00 0.4636 -10.0199 120.00 109.6956 112.1406 6.8714 2.1406 5.5969 5.8242 125.7651 140.00 129.4159 145.5969 3.6509 16.7651 -14.4965 106.5035 160.00 104.2388 168.5579 -2.2647 8.5579 131.4318 149.3693 180.00 125.8319 171.4793 -5.5999 -8.5207 -1.5682 200.00 203.5366 153.9926 4.6233 3.5366 4.3693 143.8628 177.5218 220.00 152.9208 222.8533 9.0579 2.8533 -13.1372 240.00 176.3344 232.9879 -1.1874 -7.0120 8.5218 182.2748 174.5252 -7.7496 260.00 261.1813 1.1813 1.2748
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