Use the following equation to argue that the SE( 1 ) is undefined under perfect multicollinearity

Use the following equation to argue that the SE( ˆ

1

) is undefined under perfect multicollinearity between X1 and X2:

where r12 2 is the correlation coefficient between X1 and X2 squared.

Transcribed Image Text:

SE(B) = Ze/(n - k) E(XX)(112)