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In econometrics, we call a model BLUE (Best Linear Unbiased Estimator) when it satisfies the Gauss-Markov assumptions. 1. Assumptions 1–4: Getting to the Bullseye (Unbiased) The top half of the diagram shows that the first four assumptions (Linearity, Random Sampling, Variation in X, and Zero Conditional Mean) ensure our model is Unbiased ...
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