Question

BONUS - Prove algebraically that â1 is a consistent estimator of the true effect ofX1 on Y from the population regression model, Y = 10 + 5X1 + U. (Hint: Recall that the Law of Large Numbers can be applied to sample averages to conclude that these converge in probability to their corresponding population counterparts provided that the underlying data are i.i.d. with finite variance.) BONUS- How do you explain that a, can be a consistent, yet biased, estimator in this xample?

Answer 1

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