Estimation Procedure Assumptions: Gauss-Markov Assumptions

Question 1

Orthogonality:

Answer 1

Regressors are uncorrelated with each other.

Question 2

Spherical errors:

Answer 2

Independence ===> Error is uncorrelated with itself.

Homoskedasticity ===> Error variance is constant.

Question 3

Exogeneity:

Answer 3

Error term is uncorrelated with the regressors.

Question 4

Linearity:

Answer 4

Dependent variable is a linear function of the model parameters.

Question 5

Normality:

Answer 5

Error term is normally distributed.