Measurement Errors, Linear Regression, Variance, Correlation.
imperfectly measured regression variable (Image by Author) We got this model from replacing x*_3 with (x_3 — δ) in the original model. In the above model, x_2 and x_3 are uncorrelated with the error term ϵ of the original model. Let’s examine the first one of the above two scenarios. x_3 is not