Consider the multiple regression of y on K variablesXand an additional variable z. Prove that under the
Question:
Consider the multiple regression of y on K variablesXand an additional variable z. Prove that under the assumptions A1 through A6 of the classical regression model, the true variance of the least squares estimator of the slopes on X is larger when z is included in the regression than when it is not. Does the same hold for the sample estimate of this covariance matrix? Why or why not? Assume that X and z are nonstochastic and that the coefficient on z is nonzero.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 62% (8 reviews)
We consider two regressions In the first y is regressed on K variables X The variance of the least squares estimator b XX Xy Varb oXX In the second y ...View the full answer
Answered By
Muhammad adeel
I am a professional Process/Mechanical engineer having a vast 7 years experience in process industry as well as in academic studies as a instructor. Also equipped with Nebosh IGC and lead auditor (certified).
Having worked at top notch engineering firms, i possess abilities such as designing process equipment, maintaining data sheets, working on projects, technical biddings, designing PFD and PID's etc.
Having worked as an instructor in different engineering institutes and have been involved in different engineering resrearch projects such as refinery equipment designing, thermodynamics, fluid dynamics, chemistry, rotary equipment etc
I can assure a good job within your budget and time deadline
4.90+
52+ Reviews
60+ Question Solved
Related Book For
Question Posted:
Students also viewed these Econometric questions
-
Consider the multiple regression of y on K variables X and an additional variable z. Prove that under the assumptions A1 through A6 of the classical regression model, the true variance of the least...
-
Show that in the multiple regression of y on a constant, x1 and x2 while imposing the restriction 1 + 2 = 1 leads to the regression of y x1 on a constant and x2 x1.
-
Show that in the multiple regression of y on a constant, x 1 and x 2 while imposing the restriction 1 + 2 = 1 leads to the regression of y x 1 on a constant and x 2 x 1 .
-
Dream House Builders, Inc. applies overhead by linking it to direct labor. At the start of the current period, management predicts total direct labor costs of $100,000 and total overhead costs of...
-
In Figure 14.3, we calculated the book and market long-term debt-to-equity ratios of George Weston Ltd. Using Enbridge's annual report calculate the company's book long-term debt-to-equity ratio for...
-
A chemical engineer is studying the effect of temperature and stirring rate on the yield of a certain product. The process is run 16 times, at the settings indicated in the following table. The units...
-
Describe how the use of technology in the selection process is adding value to organizations.
-
On January 1, 2013, Plains Power Company overhauled four turbine engines that generate power for customers. The overhaul resulted in a slight increase in the capacity of the engines to produce power....
-
Name 5 examples of how government has overstepped biblical principles in some form of economic policy. A specific piece of legislation relating to business regulation or taxation. The "party...
-
Compute the missing amount (?) for each company. (Amounts are in millions.) At the end of the year, which company had the highest net income? highest percent of net income to revenues? Babble Co....
-
The following sample moments for x = [1, x1, x2, x3] were computed from 100 observations produced using a random number generator:? The true model underlying these data is y = x1 + x2 + x3 + . a....
-
For the classical normal regression model y = X + with no constant term and K regressors, assuming that the true value of is zero, what is the exact expected value of F[K, n K] = (R2/K)/[(1 ...
-
While maintaining the sole proprietorship structure? Explain your answer.
-
Shannon, Inc., changed from the average-cost to the FIFO cost flow assumption in 2015. The increase in the prior years income before taxes is 1,200,000. The tax rate is 40%. Prepare Shannons 2015...
-
This is an open exercise for the readers. Every algorithm that is solved using recursion (system stack) can also be solved using user defined or library defined stack. So try to figure out what all...
-
During 2015, Simms Company redeemed 2,000,000 of bonds payable for 1,880,000 cash. Indicate how this transaction would be reported on a statement of cash flows, if at all.
-
Were the shares of stock issued as a result of Snaps initial public offering (IPO) sold in a primary market or a secondary market? Was the IPO an example of direct finance or indirect finance?
-
In its 2016 Annual Report, Amazon stated, We have foreign exchange risk. a. Briefly explain why Amazon is exposed to foreign exchange risk. b. If Amazon did not have operations in foreign countries,...
-
Shetland Inc. had pretax financial income of \($154\),000 in 2015 in its first year of operations. Included in the computation of that amount is insurance expense of \($4\),000, which is not...
-
r = 0.18 Find the coefficients of determination and non-determination and explain the meaning of each.
-
What were some economic impacts of the Great Depression for workers? For businesses?
-
In the aforementioned study, Solow states: A scatter of q/A against k is shown in Chart 4. Considering the amount of a priori doctoring which the raw figures have undergone, the fit is remarkably...
-
A regression model with K = 16 independent variables is fit using a panel of sevenyears of data. The sums of squares for the seven separate regressions and the pooled regression are shown below. The...
-
Reverse regression. A common method of analyzing statistical data to detect discrimination in the workplace is to fit the regression y = + x' + d + , (1) where y is the wage rate and d is a dummy...
-
4. The water in Earth's atmosphere blocks most of the infrared waves coming from space. In order to observe light of this wavelength, the Kuiper Airborne Observatory has been developed. The...
-
What amount of gain should Pharoah recognize on the exchange assuming lack of commercial substance?
-
If R1=7 Q, R2=3 Q, R3=9 Q, V= 12 V, and V2=8 V. Find the current (in A) that pass through R. R R R V V 2 +
Study smarter with the SolutionInn App