faithsmith5231 faithsmith5231

30-04-2024
Mathematics

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You have two regression models:
Yi=β0+β1Xi+ui

And
Yi∗=α0+α1Xi∗+ui

In the first model Y and X are in the original variables. In the second model Y is demeaned value of Y and X∗ is the demeaned value of X. How beta 0 is related to alpha 0? How beta1 is related to alpha1?

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