Which of the following statements is correct concerning the conditions required for OLS to be a usable estimation technique?
A) The model must be linear in the parameters
B) The model must be linear in the variables
C) The model must be linear in the variables and the parameters
D) The model must be linear in the residuals.

Question

Quizplus · Accepted Answer

The model must be linear in the parameters for Ordinary Least Squares (OLS) to be a usable estimation technique. This means that each predictor's effect is linearly related to the dependent variable, but the predictors themselves can be in any form (e.g., squared, logarithmic).

Which of the Following Statements Is Correct Concerning the Conditions