ECON 441: Introduction to Econometrics Lecture Notes of Lecture 7 Statistically speaking, saying that our OLS estimators are unbiased is saying that and In practice, it means asking if, on average our equals the parameter that it is supposed to estimate. Show that the estimator formula derived in class can be simplified even further to: 1 =Pn i=1(xi x)yi Pn i=1(xi x)2 After proving that 1 = 1 P(xi x)xiP(xi x)2 E[u|xi] we need to assume , that is, in order to prove that 1 is unbiased. If U and X are correlated 1 will be If X is randomly assigned, we have reasons to believe that X and U are 1