Xiyu

Question 1

Gauss Markov Assumptions

Answer 1

1. Linearity: the parameters we are estimating using the OLS method must be themselves linear.
2. Random: our data must have been randomly sampled from the population.
3. Non-Collinearity: the regressors being calculated aren’t perfectly correlated with each other.
4. Exogeneity: the regressors aren’t correlated with the error term.
5. Homoscedasticity: no matter what the values of our regressors might be, the error of the variance is constant.