... x
2
and not x
1
.So,whereis
x
1
? In fact, it is the constant term, usually represented by a column of ones
of length T :
x
1
=
⎡
⎢
⎢
⎢
⎣
1
1
.
.
.
1
⎤
⎥
⎥
⎥
⎦
(5.3)
11 2 Real Estate Modelling and ... k
=
10 .96
15 − 3
= 0. 91 (5 .14 )
The variance–covariance matrix of
ˆ
β is given by
s
2
(X
X)
1
= 0. 91( X
X)
1
=
⎡
⎣
1. 82 3 .19 −0. 91
3 .19 0. 91 5.92...