In the structural relationship model, the solution to the equations in (12 2 20) implies a restriction on , the same restriction seen in the functional relationship case (a) Show that in (12 2 20), the MLE of Iuml 2 Icirc acute is nonnegative only if Sxx yen (1 )Sxy Also, the MLE of Iuml 2 Icirc micro is nonnegative only if Syy yen Sxy (b) Show that the restrictions in part (a), together with the rest of the equations in (12 2 20), imply that Szyl Szz Syy Szyl

Question: In the structural relationship model, the solution to the equations in (12.2.20) implies a restriction on , the same restriction seen in the functional relationship

In the structural relationship model, the solution to the equations in (12.2.20) implies a restriction on , the same restriction seen in the functional relationship case.
(a) Show that in (12.2.20), the MLE of Ïƒ2Î´ is nonnegative only if Sxx ‰¥ (1/)Sxy. Also, the MLE of Ïƒ2Îµ is nonnegative only if Syy ‰¥ Sxy.
(b) Show that the restrictions in part (a), together with the rest of the equations in (12.2.20), imply that

|Szyl Szz Syy |Szyl

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