Question: 5.10 Let Xi denote a binary variable and consider the regression Yi = b0 + b1Xi + ui. Let Y0 denote the sample mean for

5.10 Let Xi denote a binary variable and consider the regression Yi =

b0 + b1Xi + ui. Let Y0 denote the sample mean for observations with X = 0 and let Y1 denote the sample mean for observations with X = 1.

Show that b n

0 = Y0, b n

0 + b n

1 = Y1, and b n

1 = Y1 - Y0.

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