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Consider the following multivariate regression model for the determinants of a person's annual consumption, C: C=Bo+BL+ 2N + 3A+u, where L is annual labour
Consider the following multivariate regression model for the determinants of a person's annual consumption, C: C=Bo+BL+ 2N + 3A+u, where L is annual labour income, N is annual non-labour income, and A is age at the end of the calendar year. If we only want to know the effect of the sum of labour and non-labour income, the following model may be estimated: C = 0 + 1 (L + N) + 2A + v. Prove that = + B2 is an estimator of that is unbiased.
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