OLS Does Not Automatically Produce Unbiased Estimates

question 16

Essay

OLS does not automatically produce unbiased estimates. Please briefly explain the condition that must be satisfied for OLS to produce unbiased estimates.

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Definitions:

Private Sector

The sector of the economy operated by private individuals and businesses aiming for profit, without direct governmental management.

Excluded

Not included, left out, or omitted from a group, list, or category.

Rivalry in Consumption

A situation where the consumption of a good or service by one individual reduces its availability for consumption by others.

Public Good

Offerings of goods or services to the whole society at no expense, facilitated by either the state or private entities, not pursuing profitability.