Question

Explain, in your own words, why it is desirable that OLS estimators be consistent. As part of your answer, explain what is meant by a "consistent" estimator.

Answer 1

One of the main reasons why OLS estimators need to be consistent is the fact that these estimators can show only unbiasedness when they have minimum variance. If the variance is minimum then the deviation is very low that means consistency is high and this tells us that the results are nearly accurate. That is the reason why they should be consistent. Consistent estimator is the one which shows the true parameter value or close to something that when the sample size keep on increasing or in other words a consistent estimator is one which has minimum variance which is a replica of unbiasedness.