Consider the simple linear regression model Y =B0 + B1x + e suppose that the analyst wants to use z = x – x as the regress or variable.
(a) Using the data in Exercise 11-12, construct one scatter plot of the (xi, yi) points and then another of the (zi = xi – x, y) points. Use the two plots to intuitively explain how the two models, Y = B0 + Bix + E and, are related.
(b) Find the least squares estimates of B*0 and B*I and in the model Y = B*0 + B*Iz + E. How do they relate to the least squares estimates and B0 and B1?