Fuller and Battese (1973) transformation for the two-way random effects model.

(a) Verify (3.10) and (3.13) and check that \(\Omega^{-1} \Omega=I\) using (3.14).

(b) Verify that \(\Omega^{-1 / 2} \Omega^{-1 / 2}=\Omega^{-1}\) using (3.14).

(c) Premultiply \(y\) by \(\sigma_{u} \Omega^{-1 / 2}\) from (3.15) and show that the typical element is given by (3.16).

Transcribed Image Text:

22= E(uu) = ZE ()Z = o(INJT) + 0(JN + ZxE(XX')Z\ + INT IT) + 0(IN IT) (3.10)