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1. Derive the critical values of B, and #; that minimize the residual sum of squares for the following sample regression model Yi=po+ b Xi+
1. Derive the critical values of B, and #; that minimize the residual sum of squares for the following sample regression model Yi=po+ b Xi+ 2. Derive the critical values of ap and a7 that minimize the residual sum of squares for the following sample regression model Yi=ap+a (XiX)+i 3. Download this dataset and load it into STATA for this question. Alternatively you can load the dataset directly from TOOAANH W G luacsiiond dta a) Use the answers from question 1 to get the values for 60 and fi 1- b) Generate the predicted values of ' c) Calculate the mean of the true value of Y, and compare it to the mean of the predicted value of Y. Are they the equal? d) Generate the sample error term e) Derive the value of B? f) How much of the variation in Y is explained by X ? Hint: Use preserve, collapse, and restore to make everything a bit easier
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