In which of the following cases OLS estimation of Healthcare=a+bAge+u will be biased? a) Only include in your estimation sample individuals whose health care spending is more than 500 per year. b) Use a random sample. c) Healthcare is recorded with some random typing errors. d) The error variance is larger at an older age.
In which of the following cases OLS estimation of Healthcare=a+bAge+u will be biased? a) Only include in your estimation sample individuals whose health care spending is more than 500 per year. b) Use a random sample. c) Healthcare is recorded with some random typing errors. d) The error variance is larger at an older age.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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In which of the following cases OLS estimation of Healthcare=a+bAge+u will be biased?
a) Only include in your estimation sample individuals whose health care spending is more than 500 per year.
b) Use a random sample.
c) Healthcare is recorded with some random typing errors.
d) The error variance is larger at an older age.
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