Consider the regression model log(Wage) = Bo + B, · Educ + B2 ▪ Age + Bz • Ability +U, where Wage indicates the individual's wage, Educ (exogenous) the years of education, Age (exogenous) the age in years, and Ability (endogenous) the individual's level of ability at work. Now we have three other jointly exogenous variables, ParEduc, the parents' education level, Expr, the individual's years of work experience, and KWW, the knowledge of world work score. If the first-stage F statsitic now is 46.78, the Sargan statistic is 4.29, and the Hausman statistic is 25.49. The table of distributions are provided above. It is implied that O A. both TSLS and OLS are consistent under the 5% significant level; hence, it is equivalent to use either one. O B. both TSLS and OLS are consistent under the 5% significant level; hence, we should use OLS for efficiency. O C. the TSLS estimator will be consistent, but OLS is inconsistent, under the 5% significant level; hence, we use TSLS.
Consider the regression model log(Wage) = Bo + B, · Educ + B2 ▪ Age + Bz • Ability +U, where Wage indicates the individual's wage, Educ (exogenous) the years of education, Age (exogenous) the age in years, and Ability (endogenous) the individual's level of ability at work. Now we have three other jointly exogenous variables, ParEduc, the parents' education level, Expr, the individual's years of work experience, and KWW, the knowledge of world work score. If the first-stage F statsitic now is 46.78, the Sargan statistic is 4.29, and the Hausman statistic is 25.49. The table of distributions are provided above. It is implied that O A. both TSLS and OLS are consistent under the 5% significant level; hence, it is equivalent to use either one. O B. both TSLS and OLS are consistent under the 5% significant level; hence, we should use OLS for efficiency. O C. the TSLS estimator will be consistent, but OLS is inconsistent, under the 5% significant level; hence, we use TSLS.
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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Transcribed Image Text:Consider the regression model log(Wage) = Bo + B1 * Educ + ß2 * Age + B3 * Ability + U, where Wage indicates the individual's wage, Educ
(exogenous) the years of education, Age (exogenous) the age in years, and Ability (endogenous) the individual's level of ability at work.
Now we have three other jointly exogenous variables, ParEduc, the parents' education level, Expr, the individual's years of work experience,
and KWW, the knowledge of world work score.
If the first-stage F statsitic now is 46.78, the Sargan statistic is 4.29, and the Hausman statistic is 25.49. The table of distributions are provided
above. It is implied that
O A. both TSLS and OLS are consistent under the 5% significant level; hence, it is equivalent to use either one.
O B. both TSLS and OLS are consistent under the 5% significant level; hence, we should use OLS for efficiency.
O C. the TSLS estimator will be consistent, but OLS is inconsistent, under the 5% significant level; hence, we use TSLS.
O D. both TSLS and OLS are inconsistent.
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