β_hat = ([inv(X'X)]X')(Xβ + epsilon) β_hat = β + ([inv(X'X)]X')epsilon β_hat is an unbiased estimator of β under two conditions: 1. X is non-stochastic E(β_hat) = β + E[([inv(X'X)]X')epsilon] if X is deterministic, this would reduce to; E(β_hat) = β + ([inv(X'X)]X') E[epsilon] The second term on right hand side, E[epsilon] is zero under one of the Gauss markov assumption. 2. X is stochastic but independent of error(epsilon) Using this, we can reduce the equation to; E(β_hat) = β + inv(X'X)] E[(X')epsilon] where E[(X')epsilon] = 0 from an assumption that comes from one of the OLS's properties, E[X'e] = 0. Reference: https://web.stanford.edu/~mrosenfe/soc_meth_proj3/matrix_OLS_NYU_notes.pdf Thanks Anurag