asked 224k views
0 votes
Use the rules of expected value to show that x-y is an unbiased estimator of ________?

1 Answer

4 votes

Final answer:

The expression x-y is an unbiased estimator of 0, assuming that y is a perfect prediction of x and there's no error in prediction, as E(x-y) is calculated as E(x)-E(y) which ultimately equates to 0.

Step-by-step explanation:

To show that x-y is an unbiased estimator of a certain parameter, we need to use the rules of expected value, also known as the mean or expected value. The expected value of a random variable X is denoted as E(X), which represents the long-term average if an experiment is repeated many times. If x is an independent variable and y is a dependent variable such as in a regression setting, we assume there's an underlying true relationship, possibly y = βx + ε, where ε is the error term with E(ε) = 0. If we consider x as the third exam score and y as the final exam score, and we assume that the true relationship is such that the final exam score is perfectly predicted by the third exam score without error, then y would equal the expected value of the final exam score given x.



Now, the expected value of x-y, using linearity of expectation, is E(x-y) = E(x) - E(y). If E(y) is equal to x (since we assume y is perfectly predicted by x in our theoretical model), then E(x-y) = E(x) - x = 0, meaning we expect no difference on average if y is a perfect prediction of x. Therefore, x-y would be an unbiased estimator of 0, indicating that on average, the estimator hits the true difference, which is zero in this case.

answered
User Dandax
by
8.6k points
Welcome to Qamnty — a place to ask, share, and grow together. Join our community and get real answers from real people.