Question

A)why it is desirable that OLS estimators of the intercept and slope parameters be unbiased. As part of your answer, explain what it means for these estimators to be unbiased? B)why it is desirable that OLS estimators be consistent. As part of your answer, explain what is meant by a "consistent" estimator? C) what it means to be a BLUE estimator?

Answer 1

BLUE Estimators are called as Best Linear unbiased estimators as Regression line is linear in population parameters,Unbiased and Efficient estimators.

If Sample estimators are not unbiased then Samplpe estimator will not converge to population parameter as E(B_)=B for unbiased estmator

if sample estimator is inconsistent then there is a case of endogenity as Cov(X,u)=!0

If Sample estimator is ineffiecient then we will not have Minimum variance

Consistent estimator is when we increase the sample size covariance between Independant variable and error trem is zero

OLS estimators are always unbised efficient and consistent.