Question

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Question 8 (7 points): Estimate a model explaining the midterm grade in the Econometrics class (between 1 and 10) as a function of the weekly time spent studying Econometrics (hours). Based on the following data fin and 1 . Based on estimated coefficients, predict outcome У and calculate residual e for each observation β0 ' SHOW YOUR WORK! Name:y 4 Jane Josh Mary 10 6

Answer 1

Step by step solution is provided in the pic attached here.

Y_1 = beta_0^cap + beta^n_1 x_i + e_i from ols estimation we have beta^cap_1 = sigma^3_i = 1(x_i - x^bar)(y_i - y^bar)/sigma^3_i = 1 (x_i - x^bar)^2 x^bar = 11/3 = 3.67 y^bar = 23/2 = 7.67 = (4 - 3.67)(8 - 7.67) + (1 - 3.67) (5-7.67) + (6 - 3.67)(10 - 7.67)/(4 - 3.67)^2 + (1 - 3.67)^2 + (6 - 3.67)^2 = 12.667/12.667 beta^cap_1 = 1 beta^cap_o = y^bar - beta^cap_1 x^bar = 7.67 - (1) (3.67) beta^cap_0 = 4

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