Question: Suppose that the classical regression model applies but that the true value of the constant is zero. Compare the variance of the least squares slope

Suppose that the classical regression model applies but that the true value of the constant is zero. Compare the variance of the least squares slope estimator computed without a constant term with that of the estimator computed with an unnecessary constant term.

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The OLS estimator fit without a constant term is b x y x x Assuming that the constant term is i... View full answer

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