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= An investigator correctly believes that the relationship between two vari- ables x and y is given by y; - B + Bx +

 

= An investigator correctly believes that the relationship between two vari- ables x and y is given by y; - B + Bx + i. Given a sample of observations on y, x, and a third variable z (which is correlated with x and uncorrelated with ), the investigator estimates as n (Zi - z) (Yi - y) n ( zi - z) (xi x) - i=1 Demonstrate that this estimator is unbiased. [2p]

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To demonstrate that the given estimator of 2 is unbiased we need to show that its expected value is equal to the true value of the parameter 2 The est... blur-text-image

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