Question: Regression through the origin. Consider the following regression through the origin: Y i = 2 X 2i + 3 X 3i + u

Regression through the origin. Consider the following regression through the origin:

Yi = β̂2X2i + β̂3X3i + ûi

a. How would you go about estimating the unknowns?

b. Will Σûi be zero for this model? Why or why not?

c. Will Σûi X2i = Σûi X3i = 0 for this model?

d. When would you use such a model?

e. Can you generalize your results to the k-variable model?


Step by Step Solution

★★★★★

3.42 Rating (171 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

a The normal equations would be b No for the sa... View full answer

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

Document Format (2 attachments)

PDF file Icon

1529_605d88e1ce948_656277.pdf

180 KBs PDF File

Word file Icon

1529_605d88e1ce948_656277.docx

120 KBs Word File

Students Have Also Explored These Related Econometrics Questions!

Q:

Consider the following regression-through-the origin model: Yi = X i + u i , for i = 1, 2 You are told that u1 N(0, 2 ) and u 2 N(0, 2 2 ) and that they are statistically independent. If X 1 =+1...

Q:

How would you go about deciding if COPPA has been effective?

Q:

How would you go about combining individual and group-based PFP systems?

Q:

There are important applications in which due to known scientific constraints, the regression line must also go through origin (i.e. the intercept must be zero). In other words, the model should read...

Q:

Consider the following time series: Quarter Year 1 Year 2 Year 3 1 71 68 62 2 49 41 51 3 58 60 53 4 78 81 72 (a) Choose a time series plot. 100 80 60 yt 40 20 0 9 10 11 12 Periodt 100 80 60 yt 40 20...

Q:

No idea how to go about finding the regression equation manually WITHOUT Excel. Please advise, thank you. Shop Now Month11 = I II NovelLiver 0 otherwise Other than this change, the multiple...

Q:

Login Required user id password Login Forgotten your password? ECONOMICS 2123B - ECONOMETRICS II LECTURE 5: SPECIFICATION OF REGRESSION VARIABLES George Orlov Department of Economics Western...

Q:

lup ] (d) Show how a generating (or "mother") wavelet (x) can spawn a family of "daughter" wavelets jk(x) by simple shifting and scaling operations, and explain the advantages of representing...

Q:

\fCOMPLEX VARIABLES AND APPLICATIONS Eighth Edition James Ward Brown Professor of Mathematics The University of Michigan-Dearborn Ruel V. Churchill Late Professor of Mathematics The University of...

Q:

\fCOMPLEX VARIABLES AND APPLICATIONS Eighth Edition James Ward Brown Professor of Mathematics The University of Michigan-Dearborn Ruel V. Churchill Late Professor of Mathematics The University of...

Q:

1. A property in a great location with a good industrial zoning is currently available for purchase. It's close to a thriving shopping center and has a promising retail market. As an investor or...

Q:

The ABC Inc filed for bankruptcy and all shareholders incurs loss. Only two shareholders with 60% and 40% outstanding shares owning each. Shareholder with 60% ownership contributed $162,000 and...

Q:

MindTranquil Corp provides an Employee Wellness Account ( EWA ) program, allowing employees to allocate tax - free funds at the start of the year for wellness - related expenses, such as gym...

Q:

2. Calculate the CPI in 2013 if the CPI basket contains the 2013 quantities.

Q:

If a firm were interested in estimating the distribution of income in the state of California, how could it proceed? Be specific.

Q:

If a firm were interested in estimating sand and clay production in Georgia, how could it proceed? Be specific.

Q:

Explain why a company might want to do focus group interviews rather than individual interviews with the same people.

Q:

1.) A pension plan is obligated to make disbursements of $1 million, $2 million, and $1 million at the end of each of the next three years, respectively. The annual interest rate is 10%. If the plan...

Q:

In a past presidential election, 39,394,643 people voted for Candidate A; 39,318,459 for Candidate B; and 156, 156 for third-party candidates. a. What percentage of voters chose Candidate A? b. Would...

Q:

i need some help thank you Decision Tree Analysis Figure 2.12. Decision tree analysis. Your company needs to decide either to develop a new product with an investment of $400,000 or to upgrade an...