Gauss Markov;s Theorem

 

Gauss Markov Theorem

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 The Gauss Markov theorem says that, under certain conditions, the ordinary least squares (OLS) estimator of the coefficients of a linear regression model is the best linear unbiased estimator (BLUE) (Gauss, 1821).

 Consider the simple linear Regression Model

1. The OLS estimate is linear function of the response variable.

2.  The OLS estimates are unbiased estimators of regression parameters.

3. The variances of OLS estimates

4. The variance of the OLS estimates has minimum variance.

• Read More: Sampling Distribution of Regression Parameters