Question: 1. (a) Why does OLS estimation involve taking vertical deviations of the points to the line rather than horizontal distances? (b) Why are the vertical

1.

(a) Why does OLS estimation involve taking vertical deviations of the points to the line rather than horizontal distances?

(b) Why are the vertical distances squared before being added together?

(c) Why are the squares of the vertical distances taken rather than the absolute values?

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