Question
Are following answers for questions (a) and (b) correct? You have the results of a simple linear regression based on state-level data and the District
Are following answers for questions (a) and (b) correct?
You have the results of a simple linear regression based on state-level data and the District of Columbia, a total of N=51 observations.
(a) The estimated error variance ^2=2.04672. What is the sum of the squared least squares residual?
Answer: ^2 = sum of e^2 / (N-2) = sum of e^2 / (51 -2) = sum of e^2 / 49 = 2.04672
Sum of e^2 = 100.289
(b) The estimated variance of b2 is 0.00098. What is the standard error of b2? What is the value of (Xx )2?
The standard error of b2 = variance of b2 ^ (1/2) = 0.00098 ^ = 0.0313
In OLS, var(b2) = ^2 / (Xx )2, so (Xx )2 = ^2 / var(b2) = 2.04672 / 0.00098 = 2088.49
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