Author Question: Suppose you were to run a regression of leisure travel expenditures by households on household ... (Read 84 times)

washai · **on:** Jun 24, 2018

Suppose you were to run a regression of leisure travel expenditures by households on household income. We would expect that households with low incomes do not travel much.

High-income households may or may not travel much, depending on the household's preferences for travel. The results from this regression will be subject to: A) multicollinearity.
B) specification bias.
C) autocorrelation.
D) heteroscedasticity.

Question 2

Given the results for possible magnitudes of the finite population correction factor,

for samples of n =15 observations from populations of N = 15, 30, 60, 100, 500, 1,000, 5,000, and 10,000 members, discuss the practical significance of using the finite population correction factor for samples of 20 observations from populations of different sizes.

smrtceo · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

D

Answer to Question 2

The correction factor tends toward a value of 1 and becomes progressively less important as a modifying factor when the sample size decreases relative to the population size.