National open university of nigeria introduction to econometrics II eco 356

INTRODUCTION TO ECONOMETRICS II

ECO 306

NOUN
51 From the definitions of Cov(X, Y) and Var(X) one can obtain alternative expressions for b
2


( )
( )

∑
(
̅)(
̅)


∑
(
̅)


∑
(
̅)(
̅)

∑
(
̅)







1 2
1
n
i
n
i
xy
x



 

…[2.27] where,

x
X
X
 

y
Y
Y
 

2.1.4.0 SUMMARY
In this unit, you are expected to have learnt the essentials and applications of the concept of simple regression analyses and its estimation.
2.1.5.0 CONCLUSION
In conclusion, the concept of simple regression analyses and its estimation are explained.
2.1.6.0 TUTOR-MARKED ASSIGNMENT
1.) A researcher obtaineddata on the aggregate expenditure on services Y, and aggregate disposable personal income X, both measured in N billion at constant prices, for each of the US. states and fits the equation

̂
̂
̂

The researcher initially fits the equation using OLS regression analysis. However, suspecting that tax evasion causes both Y and X to be substantially underestimated, the researcher

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