Bo + B1x + u, suppose that E(u) # 0. Letting a, = E(u), In the simple linear regression model y = show that the model can always be rewritten with the same slope, but a new intercept and error, where the new error has a zero expected value.

College Algebra
7th Edition
ISBN:9781305115545
Author:James Stewart, Lothar Redlin, Saleem Watson
Publisher:James Stewart, Lothar Redlin, Saleem Watson
Chapter1: Equations And Graphs
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In the simple linear regression model y = Bo + B1x + u, suppose that E (u) # 0. Letting a, =
E(u),
show that the model can always be rewritten with the same slope, but a new intercept and error, where
the new error has a zero expected value.
Transcribed Image Text:In the simple linear regression model y = Bo + B1x + u, suppose that E (u) # 0. Letting a, = E(u), show that the model can always be rewritten with the same slope, but a new intercept and error, where the new error has a zero expected value.
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