Manual Weighted Least Squares Estimation
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I have estimated WLS manually by dividing each of the coefficients by income^0.5. My question is, when I do that, does it automatically divde the constant by income^0.5? If not, how would I add 1/income^0.5 for the constant? Would I just create a variable for 1/income^2 and then add it to the matrix where I have all of my coefficents? Any help you could give would be greatly appreciated!
Ajit Kasturi on 18 Jun 2020
Assuming that you are asking whether division of each element of the matrix works, Yes it does. You can divide/add the constant (in your case it is 1/income^2) element-wise to a matrix as shown below.
Income = 2;
x= [1 2 3; 2 3 4; 4 5 6];
For more information, refer the following link: