Properties of the OLS estimator
Problem
Setup: a linear regression model with a random sample
\[y_i=β_1+β_2x_{i,2}+β_3x_{i,3}+ \ldots +β_kx_{i,k}+ε_i\]
- Find an expression for RSS as a function of \(b_1,b_2,b_3\) .
- Find the derivative of RSS with respect to \(b_1\)
- Show that \(∑e_i=0\)
- Find the derivative of RSS with respect to \(b_2\)
- Show that \(∑e_ix_{i,2}=0\)
Solution