Let X i denote a binary variable and consider the regression Y i = 0 + 1 X i + u i. Let 11eb9b5b_3db0_d45a_bf3e_09590789da64_SM2686_00 denote the sample mean for observations with X = 0 and 11eb9b5b_3db0_d45b_bf3e_8d315080a04a_SM2686_11 denote the sample mean for observations with X= 1. Show that 11eb9b5b_3db0_fb6c_bf3e_55e07858b654_SM2686_11

Introduction to Econometrics 3rd Edition by James Stock, James Stock

Edition 3ISBN: 978-9352863501

Edition 3ISBN: 978-9352863501

Exercise 10

Let X i denote a binary variable and consider the regression Y i = 0 + 1 X i + u i. Let

denote the sample mean for observations with X = 0 and

denote the sample mean for observations with X= 1. Show that

Explanation

Verified

Given the regression model: Here, is t...