Simple linear regression model
The OLS estimator for the simple linear regression model can be written as
where }{\Sigma(x_t - \overline{x})^2}<br />
)
In the case for a sample size of three observations (T=3), this estimator can be written as:
where }{\Sigma(x_t - \overline{x})^2}, t = 1,2,3<br />
)
Assume that the full set of assumption of the SLRM hold.
Without using summation notation, use the fact that
to find
.
Explain how the assumptions of the model are used to arrive at your answer.
i started by equating
(definition of variance),
then using known results to
![= E(b_2) - [E(b_2)]^2](http://latex.codecogs.com/png.latex?= E(b_2) - [E(b_2)]^2)
would greatly appreciate if anyone could help me derive
without using any summation notation.
i suppose the end resut of
[using a proof that uses summation notation) would be
}{\Sigma(x_t - \overline{x})^2})
and,
![E[(e_t)^2] = \sigma^2](http://latex.codecogs.com/png.latex?E[(e_t)^2] = \sigma^2)
and }{\Sigma(x_t - \overline{x})^2})