Recall equation (4.37) for b.

(a) Rewrite the numerator as

Why is this valid?

(b) Consider the first term to the right of the equality in part

a. Prove that

(c) Consider the second term to the right of the equality in part

a. Prove that

where nyi =1 is the number of observations for which yi = 1 and xyi =1 is the average value of xi for those observations.

Transcribed Image Text:

(x)=(x) +(x x)y;- i=1 y=0 y=1