tag:blogger.com,1999:blog-2198942534740642384.post5112623965541849879..comments2023-10-24T03:16:41.009-07:00Comments on Econometrics Beat: Dave Giles' Blog: Zero-One MatricesDave Gileshttp://www.blogger.com/profile/05389606956062019445noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-2198942534740642384.post-25621197088953092192014-01-04T07:07:38.238-08:002014-01-04T07:07:38.238-08:00Actually, the proof in the case of omitted variabl...Actually, the proof in the case of omitted variables is a 3-liner, and doesn't require Frisch-Waugh:<br />b1=(X1'X1)^1X1'y, so E[b1]=beta1+(X1'X1)^1X1'X2beta2. b1 is biased except when (X1'X2)=0.<br />The point of the post was that often the use of a zero-one matrix provides a simple approach - not that it ALWAYS simplifies a proof. I urge you to take a look at Darrell Turkington's book that I cite - it has some compelling examples.Dave Gileshttps://www.blogger.com/profile/05389606956062019445noreply@blogger.comtag:blogger.com,1999:blog-2198942534740642384.post-35125300103432061012014-01-03T11:46:24.643-08:002014-01-03T11:46:24.643-08:00Thanks - I'll check that out!Thanks - I'll check that out!Dave Gileshttps://www.blogger.com/profile/05389606956062019445noreply@blogger.comtag:blogger.com,1999:blog-2198942534740642384.post-17741454451396038242014-01-03T11:32:01.825-08:002014-01-03T11:32:01.825-08:00Nice post, Prof. Giles! Just to let you know, ther...Nice post, Prof. Giles! Just to let you know, there is an easy way to display nice maths in blogger using the tex typesetting system, it is very well described on this blog post:<br />http://holdenweb.blogspot.co.uk/2011/11/blogging-mathematics.htmlAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2198942534740642384.post-58684949690537904982014-01-03T05:13:25.317-08:002014-01-03T05:13:25.317-08:00The selection matrix works for showing unbiasednes...The selection matrix works for showing unbiasedness, but if you want to show that adding irrelevant regressors lowers precision, you have to use Frisch-Waugh...(which uses the partitioned inverse, although you can hide that from your students by solving equations).Anonymousnoreply@blogger.com