Monthly Archives: February 2015

The Gauss Markov Theorem

When studying the classical linear regression model, one necessarily comes across the Gauss-Markov Theorem. The Gauss-Markov Theorem is a central theorem for linear regression models. It states different conditions that, when met, ensure that your estimator has the lowest variance … Continue reading

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What is an indirect proof?

In economics, especially in theoretical economics, it is often necessary to formally prove your statements. Meaning to show your statements are correct in a logical way. One possible way of showing that your statements are correct is by providing an … Continue reading

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Derivation of the Least Squares Estimator for Beta in Matrix Notation

The following post is going to derive the least squares estimator for , which we will denote as . In general start by mathematically formalizing relationships we think are present in the real world and write it down in a … Continue reading

Posted in Econometrics, Statistic | Tagged , , | 14 Comments