- Thread starter floriandotti
- Start date

.........could you maybe just help me out with the covariance issue of b knot and b1?

thanks again.

thanks again.

cov[b0,b1] = E[(b0 - E[b0])(b1 - E[b1])]

= E[(b0 - Beta0)(b1 - Beta1)]

= -Xbar*E[b1 - Beta1]^2

= -Xbar*Var[b1]

= -Xbar*(Sigma^2 / SSx),

where I am making use of b0 = Ybar -b1*Xbar and E[b0] = Ybar - Beta1*Xbar, giving (b0 - E[b0]) = -Xbar*(b1 - Beta1).