An independent researcher is interested in finding out whether there exists a positive relationship between the number of years of formal education received by an individual and the number of years of formal education received by each of his parents. It is assumed that the number of years of formal education received by one parent of an individual is positively correlated with that of the other parent. The researcher randomly selects 250 individuals and estimates the following regression function: ŷ = 8+ 0.56X, where Y, denotes the number of years f formal education received by the individual and X, denotes the number of years of formal education received by the individual's father. Since the researcher only incorporates the educational attainment of an individual's father in the regression, and not that of the individual's mother, omitted variable bias will occur. Which of the following statements correctly describes the omitted variable bias? O A. Omitted variable bias arises when the omitted variable is correlated with the error term and is a determinant of a regressor. O B. Omitted variable bias arises when the omitted variable is a determinant of the independent variable but not of the dependent variable. C. Omitted variable bias arises when the omitted variable is correlated with a regressor and is a determinant of the dependent variable. O D. Omitted variable bias arises when the variance of the conditional distribution of error term is not constant and depends on the omitted variable. Suppose the researcher somehow discovers that the values of the population slope (B,), the standard deviation of the regressor (ay), the standard deviation of the error term (a), and the correlation between the error term and the regressor (Pu) are 0.48, 0.55, 0.34, 0.47, respectively. As the sample size increases, the value to which the slope estimator will converge to with high probability is (Round your answer to two decimal places.) In this case, the direction of the omitted variable bias is
An independent researcher is interested in finding out whether there exists a positive relationship between the number of years of formal education received by an individual and the number of years of formal education received by each of his parents. It is assumed that the number of years of formal education received by one parent of an individual is positively correlated with that of the other parent. The researcher randomly selects 250 individuals and estimates the following regression function: ŷ = 8+ 0.56X, where Y, denotes the number of years f formal education received by the individual and X, denotes the number of years of formal education received by the individual's father. Since the researcher only incorporates the educational attainment of an individual's father in the regression, and not that of the individual's mother, omitted variable bias will occur. Which of the following statements correctly describes the omitted variable bias? O A. Omitted variable bias arises when the omitted variable is correlated with the error term and is a determinant of a regressor. O B. Omitted variable bias arises when the omitted variable is a determinant of the independent variable but not of the dependent variable. C. Omitted variable bias arises when the omitted variable is correlated with a regressor and is a determinant of the dependent variable. O D. Omitted variable bias arises when the variance of the conditional distribution of error term is not constant and depends on the omitted variable. Suppose the researcher somehow discovers that the values of the population slope (B,), the standard deviation of the regressor (ay), the standard deviation of the error term (a), and the correlation between the error term and the regressor (Pu) are 0.48, 0.55, 0.34, 0.47, respectively. As the sample size increases, the value to which the slope estimator will converge to with high probability is (Round your answer to two decimal places.) In this case, the direction of the omitted variable bias is
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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Concept explainers
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
Question
Transcribed Image Text:Concept Exercise ő. I.I
formal education received by each of his parents. It is
An independent researcher is interested in finding out whether there exists a positive relationship between the number of years of formal education received by an individual and the number of years
assumed that the number of years of formal education received by one parent of an individual is positively correlated with that of the other parent. The researcher randomly selects 250 individuals and estimates the following regression function:
ŷ = 8 +0.56X,,
where
denotes the number of years of formal education received by the individual and X, denotes the number of years of formal education received by the h individual's father.
Since the researcher only incorporates the educational attainment of an individual's father in the regression, and not that of the individual's mother, omitted variable bias will occur.
Which of the following statements correctly describes the omitted variable bias?
O A. Omitted variable bias arises when the omitted variable is correlated with the error term and is a determinant of a regressor.
O B. Omitted variable bias arises when the omitted variable is a determinant of the independent variable but not of the dependent variable.
c. Omitted variable bias arises when the omitted variable is correlated with a regressor and is a determinant of the dependent variable.
O D. Omitted variable bias arises when the variance of the conditional distribution of error term is not constant and depends on the omitted variable.
Suppose the researcher somehow discovers that the values of the population slope (B,), the standard deviation of the regressor (a), the standard deviation of the error term (o), and the correlation between the error term and the regressor (e) are 0.48,
0.55, 0.34, 0.47, respectively.
As the sample size increases, the value to which the slope estimator will converge to with high probability is
(Round your answer to two decimal places.)
In this case, the direction of the omitted variable bias is
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