Suppose that the regression model is yi = + xi + i, where the disturbances i have f(i) =
Chapter 4, Problem 4(choose chapter or problem)
Suppose that the regression model is yi = + xi + i, where the disturbances i have f(i) = (1/) exp(i), i 0. This model is rather peculiar in that all the disturbances are assumed to be positive. Note that the disturbances have E [i | xi] = and Var[i | xi] = 2. Show that the least squares slope is unbiased but that the intercept is biased.
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