Regression without any regressor Suppose you are given the model Y i 1 u i Use OLS to find the estimator of 1 What is its variance and the RSS Does the estimated 1 make intuitive sense Now consider the two variable model Y i 1 2 X i u i Is it worth adding X i to the model If not, why bother with regression analysis

Question: Regression without any regressor. Suppose you are given the model: Y i = 1 + u i . Use OLS to find the estimator

Regression without any regressor. Suppose you are given the model: Y_i = β₁ + u_i.

Use OLS to find the estimator of β₁. What is its variance and the RSS? Does the estimated β₁ make intuitive sense? Now consider the two-variable model Y_i = β₁ + β₂X_i + u_i . Is it worth adding X_i to the model? If not, why bother with regression analysis?

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