Chapter 7: Flashcards Preview

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Flashcards in Chapter 7: Deck (8)
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1
Q

Variance of Beta1hat:

A

Var(Beta1hat|xi)=Sigma^2/SSTx

2
Q

Variance of Beta0hat:

A

Var(Beta0hat|xi)=Sigma^2/n+xbar^2*Sigma^2/SSTx

Var(Beta0hat|xi)=Sigma^2(Summation of xi^2)/(nSSTx)

3
Q

Sigma^2:

A

Error Variance.

Generally unknown,because we do not observe error term u - we only observe residuals uhat.

4
Q

Estimate of the error variance:

A

Sigmahat^2=SSR/(n-2)=(Summation of (uihat^2))/(n-2)

n-2 degrees of freedom because of the two moment restrictions.

5
Q

Estimated Variance of Beta1hat:

A

Var(Beta1hat)hat=(Sigmahat^2)/SSTx

6
Q

Estimated Variance of Beta0hat:

A

Var(Beta0hat)hat=(Sigmahat^2Summation of xi^2)/(nSSTx)

7
Q

Standard Error of Beta1hat:

A

Square root of Estimated Variance of Beta1hat

8
Q

Standard Error of Beta0hat:

A

Square root of Estimated Variance of Beta0hat