The OLS statistical formula
Summary
- Setup:
- a sample \(X,y\)
- a linear regression model \(y=Xβ+ε\)
- \(b={\left( X'X \right)}^{-1}X'y\) is the OLS estimator of \(β\)
- Result:
\[b=β+{\left( X'X \right)}^{-1}X'ε\]
- This is called the OLS statistical formula .