It is shown in Appendix CA, Section CA.3, that the preceding variance-covariance matrix can be obtained from the following formula:

where a2 is the homoscedastic variance of u and (X X)-1 is the inverse matrix appearing in Eq. (C.3.11), which gives the OLS estimator (3.

In the two- and three-variable linear regression models an unbiased estimator of a2 was given by a2 = J2 u2/(n — 2) and a2 = J2 u2/(n — 3), respectively. In the k-variable case, the corresponding formula is a ^ 2

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Rules Of The Rich And Wealthy

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