The variance of the OLS estimator is VAR( ^B)=σ² /ns²_x , where   s²_x=£x²/x You're hired to estimate   and you're going to be paid according to the accuracy of your estimate. Specifically, your revenue is ¥/std (B). You can buy as many observations as you want at
price  . The sample variance of , never changes. How many observations should you buy?

Posted Date: 3/21/2013 5:12:34 AM | Location : United States

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