Question: Show that if we consider approximations to the MSE in (4.8) and (4.17) to be accurate, then the variance of r from ratio estimation is

Show that if we consider approximations to the MSE in (4.8) and (4.17) to be accurate, then the variance of r from ratio estimation is at least as large as the variance of reg from regression estimation. Look at V (r) – V (reg) using the formulas in (4.8) and (4.17), and show that the difference is non-negative. Discuss.

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