Author Question: Errors-in-variables bias A) is only a problem in small samples. B) arises from error in the ... (Read 46 times)

Anajune7 · **on:** Jun 29, 2018

Errors-in-variables bias

A) is only a problem in small samples.
B) arises from error in the measurement of the independent variable.
C) becomes larger as the variance in the explanatory variable increases relative to the error variance.
D) is particularly severe when the source is an error in the measurement of the dependent variable.

Question 2

Consider estimating the effect of the beer tax on the fatality rate, using time and state fixed effect for the Northeast Region of the United States (Maine, Vermont, New Hampshire, Massachusetts, Connecticut and Rhode Island) for the period 1991-2001.

If Beer Tax was the only explanatory variable, how many coefficients would you need to estimate, excluding the constant?
A) 18
B) 17
C) 7
D) 11