How to estimate model coefficients using least squares


John Swanson , president of Market Research Inc., has asked you to estimate the coefficients of the model

Y = B0 + B1X1 +B2X1^2 + B3X3

where Y is the expected sales of office supplies for a large retail distributor of offices supplies, X1 is the total disposable income of residents within 5 miles of the store, and X2 is the total number of persons employed in information-based businesses within 5 miles of the store,. Recent work by a national consulting firm has concluded that the coefficients in the model must have the following restriction:

B1 + B2 = 2

Describe how you would estimate the model coefficients using least squares.

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Basic Statistics: How to estimate model coefficients using least squares
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