Regression model in matrix form

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Reference no: EM131096110

Suppose that the true (full) regression model in matrix form is:

However, the analyst assumes that the (reduced) model:

is correct and uses it for purposes of estimation. For example, the X matrix for the reduced model (XI) might include only an intercept column and columns for first-order terms, while the true model involves first-order terms (Xd and some two-factor interaction terms (X₂).

a. Show that:

Reference no: EM131096110

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