Econometric Theory/Proofs of properties of β1
To be linear, must be a linear function of , as shown below
where is a constant, at any given observation 'i'.
From the deviation-from-means form of the solution of the OLS Normal Equation for , we have
, since .
, where , which is a constant for any given 'i'-value.Last modified on 3 November 2008, at 23:24