Question

a. If the OLS estimator is unbiased for the true population parameter, is the OLS estimate...

a. If the OLS estimator is unbiased for the true population parameter, is the OLS estimate necessarily equal to the population parameter? Explain your answer in

detail.

b. Suppose that the true population regression (data generating process) is given by Y i = B 0 + B 1 X i +u i .

Further suppose that the population covariance between X i and u i is equal to some positive value A , rather than zero: COV(X i ,u i )= A>0 . Derive the

expression showing the bias of the OLS estimator for B 1 . Discuss why this covariance might be non-zero (give an example)?

Math   Statistics-And-Probability   
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