10.11 Let b nDM 1 denote the entity-demeaned estimator given in Equation (10.22), and let b nBA...

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10.11 Let b nDM 1 denote the entity-demeaned estimator given in Equation (10.22), and let b nBA 1 denote the “before and after” estimator without an intercept, so that b nBA 1 = 3ni

= 1(Xi2 - Xi1)(Yi2 - Yi1)4 > 3ni

= 1(Xi2 - Xi1)24. Show that, if T = 2, b nDM 1 = b nBA 1 . [Hint: Use the definition of X

it before Equation

(10.22) to show that X

i1 = -12

(Xi2 - Xi1) and X

i2 = 12

(Xi2 - Xi1).]

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Introduction To Econometrics

ISBN: 9781292071367

3rd Global Edition

Authors: James Stock, Mark Watson

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