Consider the problem described at the end of Section 2 6, running a regression and only estimating an intercept (i) Given a sample y i i 5 1, 2,c, n , let 0 be the solution to Show that 0 y, that is, the sample average minimizes the sum of squared residuals (ii) Define residuals uI y i y Argue that...

i Given a sample yi i 1 2 n let 0 be the solution to the minimization problemmin y bo bo 1This is th ...

Consider the problem described at the end of Section 2-6, running a regression and only estimating an

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Consider the problem described at the end of Section 2-6, running a regression and only estimating an intercept.

(i) Given a sample {y_i: i 5 1, 2,c, n}, let β́₀ be the solution to

min (y, - bo). bo =1

Show that β̅₀ = y̅, that is, the sample average minimizes the sum of squared residuals.

(ii) Define residuals u̅I = y_i– y̅. Argue that these residuals always sum to zero.

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Introductory Econometrics A Modern Approach

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Authors: Jeffrey Wooldridge

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Consider the problem described at the end of Section 2-6, running a regression and only estimating an

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min (y, - bo). bo =1

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i Given a sample yi i 1 2 n let 0 be the solution to the minimization problemmin y bo bo 1This is th...View the full answer

Introductory Econometrics A Modern Approach

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