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Find the estimators of ß1 and a1 . are they identical

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Reference no: EM13882161

Consider the following formulations of the two-variable PRF:

Model I: Yi = β1 + β2 Xi + ui

Model II: Yi = α1 + α2 ( Xi - X¯ ) + ui

a. Find the estimators of β1 and α1 . Are they identical? Are their variances identical?

b. Find the estimators of β2 and α2 . Are they identical? Are their variances identical?

c. What is the advantage, if any, of model II over model I?

Reference no: EM13882161

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