Homework Help is Here – Start Your Trial Now!
Math
Statistics
d. The linear model illustrated in diagram is GPA = a + ß*Hours-Studied + u. What does it mean that Hours-Studied are orthogonal to u? e. How is B estimated? f. Explain why an estimator of ß can only be accurate (unbiased) when E(u₁|xi) = 0?

d. The linear model illustrated in diagram is GPA = a + ß*Hours-Studied + u. What does it mean that Hours-Studied are orthogonal to u? e. How is B estimated? f. Explain why an estimator of ß can only be accurate (unbiased) when E(u₁|xi) = 0?

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
See similar textbooks
icon
Related questions
Question

d-f please

1. Consider the simple linear regression model Y₁ = a + BX₁ + u₁, where i denotes an observation, Y and X is the outcome explanatory variables and u is the error term. a. Suppose Y denotes GPA and X denotes study hours per week. Suppose that the relationship between study hours and GPA is deterministic. Specifically, if you do not study your GPA for sure will be a miserable 0.3. And, for every hour you study, your GPA will for sure increase by 0.25 points. Write the equation for this deterministic relationship. And, plot GPA conditional on study hours, where these hours runs from 0 to 16 on the X-axis. Why is ui always equal to 0? b. Why is this deterministic relationship a completely unrealistic view of reality? C. Illustrate on your figure random errors, u₁, that are positive shocks indicating that the deterministic model underpredicts the GPA. And illustrate random errors that are negative shocks indicating the model overpredicts. d. The linear model illustrated in diagram is GPA = a + ß* Hours-Studied + u. What does it mean that Hours-Studied are orthogonal to u? e. How is 3 estimated? f. Explain why an estimator of ß can only be accurate (unbiased) when E(u₁|xi) = 0?
Transcribed Image Text:1. Consider the simple linear regression model Y₁ = a + BX₁ + u₁, where i denotes an observation, Y and X is the outcome explanatory variables and u is the error term. a. Suppose Y denotes GPA and X denotes study hours per week. Suppose that the relationship between study hours and GPA is deterministic. Specifically, if you do not study your GPA for sure will be a miserable 0.3. And, for every hour you study, your GPA will for sure increase by 0.25 points. Write the equation for this deterministic relationship. And, plot GPA conditional on study hours, where these hours runs from 0 to 16 on the X-axis. Why is ui always equal to 0? b. Why is this deterministic relationship a completely unrealistic view of reality? C. Illustrate on your figure random errors, u₁, that are positive shocks indicating that the deterministic model underpredicts the GPA. And illustrate random errors that are negative shocks indicating the model overpredicts. d. The linear model illustrated in diagram is GPA = a + ß* Hours-Studied + u. What does it mean that Hours-Studied are orthogonal to u? e. How is 3 estimated? f. Explain why an estimator of ß can only be accurate (unbiased) when E(u₁|xi) = 0?
Expert Solution
steps

Step by step

Solved in 3 steps with 24 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
Statistics
ISBN:
9781119256830
Author:
Amos Gilat
Publisher:
John Wiley & Sons Inc
Probability and Statistics for Engineering and th…
Probability and Statistics for Engineering and th…
Statistics
ISBN:
9781305251809
Author:
Jay L. Devore
Publisher:
Cengage Learning
Statistics for The Behavioral Sciences (MindTap C…
Statistics for The Behavioral Sciences (MindTap C…
Statistics
ISBN:
9781305504912
Author:
Frederick J Gravetter, Larry B. Wallnau
Publisher:
Cengage Learning
Elementary Statistics: Picturing the World (7th E…
Elementary Statistics: Picturing the World (7th E…
Statistics
ISBN:
9780134683416
Author:
Ron Larson, Betsy Farber
Publisher:
PEARSON
The Basic Practice of Statistics
The Basic Practice of Statistics
Statistics
ISBN:
9781319042578
Author:
David S. Moore, William I. Notz, Michael A. Fligner
Publisher:
W. H. Freeman
Introduction to the Practice of Statistics
Introduction to the Practice of Statistics
Statistics
ISBN:
9781319013387
Author:
David S. Moore, George P. McCabe, Bruce A. Craig
Publisher:
W. H. Freeman
SEE MORE TEXTBOOKS