This topic contains a solution. Click here to go to the answer

Author Question: Under the least squares assumptions (zero conditional mean for the error term, Xi and Yi being ... (Read 141 times)

ssal

  • Hero Member
  • *****
  • Posts: 572
Under the least squares assumptions (zero conditional mean for the error term, Xi and Yi being i.i.d., and Xi and ui having finite fourth moments), the OLS estimator for the slope and intercept
 
  A) has an exact normal distribution for n > 15.
  B) is BLUE.
  C) has a normal distribution even in small samples.
  D) is unbiased.

Question 2

One of your peers wants to analyze whether or not participating in varsity sports lowers or increases the GPA of students.
 
  She decides to collect data from 110 male and female students on their GPA and the number of hours they spend participating in varsity sports. The coefficient in the simple regression function turns out to be significantly negative, using the t-statistic and carrying out the appropriate hypothesis test. Upon reflection, she is concerned that she did not ask the students in her sample whether or not they were female or male. You point out to her that you are more concerned about the effect of omitted variables in her regression, such as the incoming SAT score of the students, and whether or not they are in a major from a high/low grading department. Elaborate on your argument.
  What will be an ideal response?



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

bitingbit

  • Sr. Member
  • ****
  • Posts: 323
Answer to Question 1

Answer: D

Answer to Question 2

Answer: The presence of omitted variables will result in an inconsistent estimator for the included variable (number of hours spent in varsity sports) if at least one of the following two conditions holds: the omitted variable is relevant in affecting the GPA and/or the omitted variable is correlated with the included variable. Incoming SAT scores are clearly relevant in predicting GPAs, at least in the earlier years. Hence it is relevant. Departmental differences in the general level of grading will even more obviously have an effect on the GPA. The relationship therefore suffers from omitted variable bias.




ssal

  • Member
  • Posts: 572
Reply 2 on: Jun 29, 2018
YES! Correct, THANKS for helping me on my review


jomama

  • Member
  • Posts: 346
Reply 3 on: Yesterday
Great answer, keep it coming :)

 

Did you know?

Colchicine is a highly poisonous alkaloid originally extracted from a type of saffron plant that is used mainly to treat gout.

Did you know?

Atropine, along with scopolamine and hyoscyamine, is found in the Datura stramonium plant, which gives hallucinogenic effects and is also known as locoweed.

Did you know?

Though “Krazy Glue” or “Super Glue” has the ability to seal small wounds, it is not recommended for this purpose since it contains many substances that should not enter the body through the skin, and may be harmful.

Did you know?

Oxytocin is recommended only for pregnancies that have a medical reason for inducing labor (such as eclampsia) and is not recommended for elective procedures or for making the birthing process more convenient.

Did you know?

Although the Roman numeral for the number 4 has always been taught to have been "IV," according to historians, the ancient Romans probably used "IIII" most of the time. This is partially backed up by the fact that early grandfather clocks displayed IIII for the number 4 instead of IV. Early clockmakers apparently thought that the IIII balanced out the VIII (used for the number 8) on the clock face and that it just looked better.

For a complete list of videos, visit our video library