Originally Posted by

**Apache** I'll be honest i've not got much idea on where to start with this, could anyone point me in the right direction ?

A sample of data from 40 households in a particular area in 2007 yielded the following information, where X is disposeable income per head and Y is disposeable expenditure per head.

$\displaystyle \sum X_i = 200 $ $\displaystyle \sum Y_i= 160$

$\displaystyle \sum X_iY_i=875$ $\displaystyle \sum X$$\displaystyle ^{2}_i =1100 $

$\displaystyle \sum (Y_i - \bar{Y})^{2} = 75.25 $

a) Show that in the relationship $\displaystyle Y_i = \alpha +\beta X_i + u_i $

where $\displaystyle u_i$ is the disturbance term, the least squares regression estimates of $\displaystyle \alpha, \beta$ are 0.25 and 0.75 respectively.