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Scenario 38-3. Consider the following statistical model of workers salaries and years of job tenure, where e; stands for the random error: SALARY = 0 + ẞ1 × YEARS; + ej. Refer to Scenario 38-3. Suppose that some people are simply more capable than others. When would the estimate of ẞ, be unbiased? 0000 As long as the model is applied to observational data As long as the underlying data comes from a natural experiment As long as ability and tenure are not correlated As long as ability and tenure are correlated

Scenario 38-3. Consider the following statistical model of workers salaries and years of job tenure, where e; stands for the random error: SALARY = 0 + ẞ1 × YEARS; + ej. Refer to Scenario 38-3. Suppose that some people are simply more capable than others. When would the estimate of ẞ, be unbiased? 0000 As long as the model is applied to observational data As long as the underlying data comes from a natural experiment As long as ability and tenure are not correlated As long as ability and tenure are correlated

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Scenario 38-3. Consider the following statistical model of workers salaries and years of job tenure, where e; stands for the random error: SALARY = 0 + ẞ1 × YEARS; + ej. Refer to Scenario 38-3. Suppose that some people are simply more capable than others. When would the estimate of ẞ, be unbiased? 0000 As long as the model is applied to observational data As long as the underlying data comes from a natural experiment As long as ability and tenure are not correlated As long as ability and tenure are correlated
Transcribed Image Text:Scenario 38-3. Consider the following statistical model of workers salaries and years of job tenure, where e; stands for the random error: SALARY = 0 + ẞ1 × YEARS; + ej. Refer to Scenario 38-3. Suppose that some people are simply more capable than others. When would the estimate of ẞ, be unbiased? 0000 As long as the model is applied to observational data As long as the underlying data comes from a natural experiment As long as ability and tenure are not correlated As long as ability and tenure are correlated
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