Suppose 𝑦 = 𝛽0 + 𝛽1
𝑥1 + 𝛽2
𝑥2 + 𝜖 is linear regression
model of weekly food expenditure (y) on weekly
household income (x1
) and household size (x2
). Suppose
also that the coefficients 𝛽0
, 𝛽1
and 𝛽2
are to be estimated
using the method of Least Squares (OLS) estimation.
