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  3. suppose that the true model is y = β0 +β1x+u

Suppose that the true model is y = β0 +β1x+u. You decided to run the model...

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Economics

Suppose that the true model is y = β0 +β1x+u. You decided to runthe model without the intercept term.

1. Under what circumstance(s) would the coefficient term in yourmodel (without the intercept term) be an unbiased estimator.

2. Your boss likes your model choice because the conditionalvariance of your estimator is the most efficient (between the twomodel choices). Evaluate your boss’s statement.

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