Consider the regression model given by: Yi = βo + β1Xi + β2Zi+ ui Suppose that...

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Consider the regression model given by: Yi = βo + β1Xi + β2Zi+ ui Suppose that...

Consider the regression model given by:

Y_i = β_o + β₁X_i + β₂Z_i+ u_i

Suppose that an econometrician wishes to test the null hypothesis given by:

H_o: β₁ + β₂ = 1

Use this null hypothesis to specify a restricted form of the regression model (in a form that may be estimated using an OLS estimation procedure). State the equation that you could estimate as the restricted version of this model.

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