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How is the covariance factor computed?

Hi Christian,

Although Vince pretty much answered your question, the preprint that  
you refer to provides another description that some might find helpful,

http://arxiv.org/pdf/1406.5823v1.pdf

See "Constructing the relative covariance factor" starting at the  
bottom of p. 10 and "PLS step I: update relative covariance factor" at  
the bottom of p. 19.

The (profile) likelihood for theta that Vince discussed is equation 34  
on page 16.  Equation 30 is the likelihood for all three types of  
parameters -- theta, beta, and sigma.

Small point:  I think there is a typo in the answer below in that,
should refer to theta, not sigma.

Cheers,
Steve


Quoting Vincent Dorie <vdorie at cs.stanford.edu>: