Consider Eq. (17.13.4): To obtain the variance of Î²Ì i from the variances of aÌ i ,

Question:

Consider Eq. (17.13.4):

To obtain the variance of Î²Ì‚_i from the variances of aÌ‚_i, we use the following formula:

a. Using the preceding formula, find the variance of Î²Ì‚_i expressed as

b. If the variances of aÌ‚_i are large relative to themselves, will the variance of Î²Ì‚_i be large also? Why or why not?

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Basic Econometrics

ISBN: 978-0073375779

5th edition

Authors: Damodar N. Gujrati, Dawn C. Porter

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Question Posted: May 29, 2018 05:20 AM

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Consider Eq. (17.13.4): To obtain the variance of Î²Ì i from the variances of aÌ i ,

Question:

B; = ao + aji + azi² + . ..+ ami™ var (B) : = var (âo + âji + âzi² + · ..+ âmi™) -Σ Ei var (â;) +2iU+p)cov (â¡âp) -Σο J

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a A similar expression follows except that now we have an ad...View the full answer

Basic Econometrics

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