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
Was this article helpful?
Learning About The Rules Of The Rich And Wealthy Can Have Amazing Benefits For Your Life And Success. Discover the hidden rules and beat the rich at their own game. The general population has a love / hate kinship with riches. They resent those who have it, but spend their total lives attempting to get it for themselves. The reason an immense majority of individuals never accumulate a substantial savings is because they don't comprehend the nature of money or how it works.