Could anyone help me with the part of this question highlighted in the link? I can derive the first part, but i'm having problems canceling alpha, any help would be greatly appreciated!

http://img847.imageshack.us/img847/8853/25298638.png

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- Mar 8th 2011, 10:11 AMLHSLinear Regression: parameter estimation of alpha and beta?
Could anyone help me with the part of this question highlighted in the link? I can derive the first part, but i'm having problems canceling alpha, any help would be greatly appreciated!

http://img847.imageshack.us/img847/8853/25298638.png - Mar 8th 2011, 12:09 PMtheodds
Let Q be the function you want to minimize.

Just solve the simultaneous equation and in the usual way.

Alternatively, we might notice that in the usual matrix notation

where and solve with matrix calculus.

An obvious application is where we think that the variance grows proportionally with , so we could take - Mar 9th 2011, 08:17 AMLHS
Thank you very much! that is all sorted now!