The OLS estimators are also efficient. Here, efficiency means that among all estimators whose formulas are linear
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The OLS estimators are also efficient. Here, efficiency means that among all estimators whose formulas are linear in the dependent variable, the OLS estimator has the smallest variance. It therefore has the greatest “power” for rejecting the null hypothesis that a coefficient is zero.
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This is important because it means that the OLS estimator is able to provide the most precise and accurate estimates of the coefficients in the model ...View the full answer
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Related Book For
Cost Benefit Analysis Concepts And Practice
ISBN: 9781108401296
5th Edition
Authors: Anthony E. Boardman, David H. Greenberg, Aidan R. Vining, David L. Weimer
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