Simple linear regression. Consider the variance of₀and of₁in our simple linear regression model. An alternative and somewhat handier way to derive their formulae is by using matrix algebra. Use the matrix formula for the variance of the OLS estimator²(XX)¹, note that the matrix is2 2, invert it, consider the(1,1)and(2,2)elements, which should yield the same result that we have derived before using normal equations directly.