Category: Econometrics

Properties of Good Estimator

Small Sample properties Unbiased Estimator : Biased means the difference of true value of parameter and value of estimator. When the difference becomes zero then it is called unbiased estimator. i.e., Best Estimator : An estimator is called best when value of its variance is smaller than variance is best. i.e . Where   is another estimator. Efficient Estimator : …

Gauss-Markov Theorem

Given the assumptions of the classical linear regression model, the least-squares estimators, in the class of unbiased linear estimators, have minimum variance, that is, they are BLUE. In other words Gauss-Markov theorem holds the properties of Best Linear Unbiased Estimators. Following are some of the assumptions which should be taken into consideration for the mathematical derivation …

Expected Values or Mathematical Expectations

The expected value, or mean, of a random variable is a measure of the central location for the random variable. The formula for the expected value of a discrete random variable X follows. Expected value of a discrete random variable X can be written as i.e., Properties of Mathematical Expectations 1. The expected value of constant …

Probability Definitions

The term probability has been interpreted in terms of four definitions : 1. Classical Definitions : the classical definition states that if an experiment consists of ’S’ outcomes which are mutually exclusive, exhaustive and equally likely and  of them ate the favourable outcomes of an event A then the probability of the event is In other …