Question: The model is Y Xe with E[e j X] 0 and X 2 R. Consider the two estimators b Pni 1 XiYi

The model is Y Æ X¯Åe with E[e j X] Æ 0 and X 2 R. Consider the two estimators b¯ Æ

Pni

Æ1 XiYi Pni

Æ1 X2 i

e¯ Æ

1 n

Xn iÆ1 Yi Xi

.

(a) Under the stated assumptions are both estimators consistent for ¯?

(b) Are there conditions under which either estimator is efficient?

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