Question: Consider a linear model to the explain monthly beer consumption i 0 1 1i 2 2i 3 3i i Y = ???? +????X +???? X

Consider a linear model to the explain monthly beer consumption i 0 1 1i 2 2i 3 3i i Y = ???? +????X +???? X +???? X +???? , i i i ???? Y ???? x???????? ???? ???? , where the variable Y indicates consumption of milk, X1 is the income level of a consumer, X2 is the price per litre of beer, and X3 is the education level of a consumer. If i i E(???? |x ) = 0, and 2 2 2 i i i 1i Var(???? |x ) = ???? = ???? X , discuss the technique to obtain the GLS estimator of ????.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Econometrics Questions!

Let us consider a multiple linear regression equation of the type: i 0 1 1i 2 2i 3 3i i y = ???? +????X +???? X +???? X +???? What problems can happen if we apply the OLS method to estimate the...

Let us consider a multiple linear regression equation of the type: i 0 1 1i 2 2i 3 3i i y = ???? +????X +???? X +???? X +???? How will you apply the principal component procedure to estimate the...

Let three-variable linear regression equation be given by: i 0 1 1i 2 2i i Y = ???? +????X +???? X +???? ; (i) Explain all the terms of the given equation. (ii) Discuss the technique to estimate this...

Let us consider a multiple linear regression equation of the type: i 0 1 1i 2 2i i y = ???? +????X +???? X +???? . (i) Show that the OLS estimators of ????1 and ????2 will be undefined if the...

Let us consider a multiple linear regression equation of the type: i 0 1 1i 2 2i i y = ???? +????X +???? X +???? . If the variable X1 is linearly related to the variable X2, then show that the...

2 Consider a linear model to explain monthly beer consumption: beer 5 b0 1 b1inc 1 b2price 1 b3educ 1 b4 female 1 u E(uuinc,price, educ, female) 5 0 Var(uuinc,price, educ, female) 5 s2 inc2 . Write...

Problem 1. Consider a linear model to explain monthly beer consumption: beer = Bo + BIinc + Byprice + Bseduc + BAfemale + u, E[ulinc, price, educ, female] = 0 For the following forms of...

3 1. State the geometric reason that for a dummy variable model with a single dummy variable (i.e. yi = 0 + 1 xi + ei , where xi = 1 if success, 0 if failure) that the Psuch 5 first 5 observations...

8.2 Consider a linear model to explain monthly beer consumption: beer = Bo+ Binc+ Bprice + Beduc + Bfemale + u E(ulinc,price,educ,female) = 0 Var(u inc,price,educ,female) = oinc. Write the...

iii. Withinc on the-axis, draw a graph of the estimated MPC and APC. 5 Marks 4a. Which of the following are consequences of heteroskedasticityBriefly. (i) The OLS estimators,, are inconsistent. (ii)...

On August 10, 2009, Theta Electronic Laboratories, Inc., executed a promissory note to George and Marguerite Thomson. Three other individuals, Gerald Exten, Emil ONeil, and James Hane, and their...

Air is used as the working fluid in a simple ideal Brayton cycle that has a pressure ratio of 12, a compressor inlet temperature of 300 K, and a turbine inlet temperature of 1000 K. Determine the...

Briefly explain the problem of stranger - owned life insurance ( STOLI ) .

In this chapter we saw that the steady-state rate of unemployment is U/L = s/(s + f). Suppose that the unemployment rate does not begin at this level. Show that unemployment will evolve over time and...