5.10 Let X, denote a binary variable, and consider the regression Y = + BX...

 

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5.10 Let X, denote a binary variable, and consider the regression Y₁ = ₁ + B₁X + u. Let Yo denote the sample mean for observations with X = 0, and let Y₁ denote the sample mean for observations with X = 1. Show that Bo Yo. Bo + B₁=Y₁, and ₁=Y₁ - Yo 5.10 Let X, denote a binary variable, and consider the regression Y₁ = ₁ + B₁X + u. Let Yo denote the sample mean for observations with X = 0, and let Y₁ denote the sample mean for observations with X = 1. Show that Bo Yo. Bo + B₁=Y₁, and ₁=Y₁ - Yo

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Solution Let Y denote the sample with X ... View the full answer