Question
Sometimes it is believed that 0 is 0 because we think that E(Y|X = 0) = 0. Then the appropriate model is Yi = 1Xi
Sometimes it is believed that 0 is 0 because we think that E(Y|X = 0) = 0. Then the appropriate model is Yi = 1Xi + ei
This model is usually called "regression through the origin" since the regression line is forced through the origin. The least squares estimator of 1 minimizes n X i=1{Yi 1Xi}2 Find a formula that gives 1 as a function of the Yi s and the Xi's.
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Essentials of Business Analytics
Authors: Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
2nd edition
1305627733, 978-1305861817, 1305861817, 978-0357688960, 978-1305627734
