Estimator of 0,2, Why divide not by 1: but by n 1? ~ 1 L C( 9:, ) 1' 0; o E (Y,- )7)2 g 2 (Y; - py)2 because )7 is the least squares estimator. Thus, we need to divide by n. 1 to compensate for the difference. 0 This is also called as degree of freedom. 11 (number of observations) 1 (compensation for )7)