157 Regression anatomy the Frisch Waugh Lovell theorem

Summary unavailable. Hi everyone, my name is Lydia and this is what I wish they taught me about econometrics and introduction. In the previous videos we saw the intuition. Regression cleans both variables of X2 influence, then regresses what's left. Now we make that precise. This is the Frish war level theorem and it is one of the most important results in econometrics and in this video we're going to see the intuition before we jump into another video where we see the algebraic derivation. So let's start from the full model. Assume we have a model that is y equal to beta 0 plus beta 1x1 plus beta 2x2 and an error term u. We want to estimate beta 1 in here. The effect of x1 on y holding x2 constant. The standard